This document discusses how AWS services can help startups and developers achieve profitability. It provides an example of a company that was able to reduce costs and improve margins by 54% through optimizing its architecture on AWS. Key strategies discussed include leveraging reserved instances, spot pricing, cost-aware architecting techniques like caching with S3 and CloudFront, database optimizations, and rapid prototyping tools to reduce test/dev costs. The document emphasizes starting with understanding usage patterns, doing an apples-to-apples comparison of total costs, and continuously optimizing resources through pricing models and architectural improvements.
6. >700K registered users
1000s of transactions /day
$800.00
$700.00
Less than $3,000 USD spent to date
(roughly the cost of a Mac Book Pro)
$600.00
$500.00
$400.00
$300.00
$200.00
$100.00
$0.00
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playbasis
19. An example
!
!
!
!
!
!
Enterprise
so+ware
provider
in
APAC
Focused
on
SaaS
for
storage,
security,
collabora=on,
etc.
Backed
by
leading
VC’s
in
the
region
Strong
growth
–
winning
customers
globally
Focused
on
profitability
&
reducing
unit
costs
Worked
closely
with
the
AWS
team
to
op=mize
its
architecture
20. “Based on a True Story”
Margin
Growth
54%
reduction in
unit costs
-20%
-10%
price drop RI purchase
in S3
-22%
Migration
Cassandra
to Dynamo
-18%
Price drop in
S3 of 25%
23. Cost Optimization using different purchase models
Free Tier
On-Demand
Reserved
Spot
Get Started on AWS
with free usage & no
commitment
Pay for compute
capacity by the hour
with no long-term
commitments
Make a low, one-time
payment and receive a
significant discount on
the hourly charge
Bid for unused capacity,
charged at a Spot Price
which fluctuates based
on supply and demand
For POCs and
getting started
For spiky workloads,
or to define needs
For committed
utilization
For time-insensitive or
transient workloads
25. Reserved Instance Pricing
Make a low, one-time payment and receive a
significant discount on the hourly charge
For committed utilization
3 Versions
• Light Utilization RI
• Medium Utilization RI
• High Utilization RI
2 Terms
• 1-year
• 3-year
26. Reserved Instance Pricing
U"liza"on
RI
op"on
Savings
over
On-‐Demand
<10%
On-‐Demand
10%
-‐
40%
Light
U=liza=on
RI
Up
to
56%
40%
-‐
75%
Medium
U=liza=on
RI
Up
to
66%
>75%
Heavy
U=liza=on
RI
Up
to
71%
27.
28. • Most traffic happens in the afternoons and evenings, so they reduce the number of
instances at night by 40%.
• At peak traffic $52 an hour is spent on EC2 and at night, during off peak, the spend is as
little as $15 an hour. Saving per hour = 71%
29. Save more money by using Spot Instances
Spot
market
for
under-‐
u=lized
capacity
Requested
Bid
Price
and
Pay
as
you
go
Spot
Price
<
On-‐Demand
Price
Up
to
85%
savings
over
On
Demand
pricing
30. Use Cases for Spot Pricing
Use
Case
Batch
Processing
Types
of
Applica"ons
Generic
background
processing
(scale
out
compu=ng)
Hadoop
Hadoop/MapReduce
processing
type
jobs
(e.g.
Search,
Big
Data,
etc.)
Scien"fic
Compu"ng
Scien=fic
trials/simula=ons/analysis
in
chemistry,
physics,
and
biology
Video
and
Image
Processing/
Rendering
Tes"ng
Transform
videos
into
specific
formats
Web/Data
Crawling
Financial
HPC
Analyzing
data
and
processing
it
Hedgefund
analy=cs,
energy
trading,
etc
U=lize
HPC
servers
to
do
embarrassingly
parallel
jobs
Cheap
Compute
Backend
servers
for
Facebook
games
Provide
tes=ng
of
so+ware,
web
sites,
etc
31.
32. Optimizing Video Transcoding Workloads
for a FREEMIUM model
Premium Offering
Free Offering
Optimize for reducing cost
Acceptable Delay Limits
Optimized for Faster response
No Delays
Implementation
–
–
–
–
Leverage spot pricing
Maximum Bid Price
< On-demand Rate
Use on-demand Instances, if delay
Get strongly reduced price for your
workload
Implementation
– Invest in Reserved Instances
– Use on-demand for Elasticity
Get Instant Capacity for higher price
34. “Give me 4 fault tolerant algorithms and I can pick
the best one almost with my eyes closed.
If you then ask me which one is best for the
business, in terms of dollar costs, I would be
clueless...”
Werner Vogels, CTO, Amazon
35. Cost optimization through ‘Cost Aware Architecting’
Reduce Cost of…
Compute
…by leveraging:
1. S3 & CloudFront for Caching & Offloading
2. Auto-Scaling done Right
Storage
3. Storing derivative objects in S3 ‘Reduced Redundancy’
Database
4. Read Replicas and/or ElastiCache
Test & Dev
5. Rapid proto-typing & Lean Dev/Test
36. Cost Aware Architecting to Reduce costs of EC2
1. S3 & CloudFront for Caching & Offloading
• Reduce your compute demand and costs
• Improve end-user experience
• Increase reliability and durability
38. Cost Aware Architecting to Reduce costs of EC2
1. S3 & CloudFront for Caching & Offloading
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image and then insert it again.
42. Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
• Elastic Load Balancing and (event-driven) Auto Scaling
• Notification of pending news flash (with audible alarm)
• On-demand ramp up of capacity (6 mins.)
• Subscriber alert push delivered
• Mass response traffic handled (followed by ramp down)
44. Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
Buuuk
Straits Times
45. Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
46. Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
47. Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
48. Cost Aware Architecting to Reduce costs of EC2
2. Auto-Scaling done Right with Real Time reaction response
49. Cost Aware Architecting to Reduce costs of S3
3. Storing derivative objects in S3 ‘Reduced Redundancy’
• Original vs. derived assets : 33% savings
• Single reference and consistency
• Control, accurate logs and tracking
Reduced Redundancy Storage
‘RRS’
50. Cost Aware Architecting to Reduce costs of DB
4. Read Replicas and/or ElastiCache (‘Database Smarts’)
•
•
•
•
Scale out and share work
Optimal performance, minimize load
Enhance reliability, ensure data safety
Cost reduction
54. Cost Aware Architecting to Reduce costs of Test/Dev
5. Rapid proto-typing & Lean Dev/Test
• Inexpensive idea validation
• Seamless switch over and versioning
• Rapid dev / test agility
57. Tradi=onal
HW
/
Hos=ng
WASTE
On and Off
Fast Growth
Variable peaks
Predictable peaks
CUSTOMER DISSATISFACTION
58. AWS
=
Elas=c
Capacity
On and Off
Fast Growth
Variable peaks
Predictable peaks
59. When
calcula"ng
TCO…
#1
Start
by
understanding
your
use
cases
&
usage
paUerns
#2
Apples
to
Apples
–
Take
all
the
fixed
costs
into
considera"on
60.
61.
62. When
calcula"ng
TCO…
#1
Start
by
understanding
your
use
cases
&
usage
paUerns
#2
Apples
to
Apples
–
Take
all
the
fixed
costs
into
considera"on
#3
Leverage
‘Cost
Aware
Architec"ng’
to
reduce
resources
63. Tradi"onal
Hos"ng
vs
AWS
# of
(virtual)
servers
60
50
40
30
20
10
0
Hos=ng
Hosting
Offload
to S3
Caching
with CF
AutoScaling
Etc.
64. When
calcula"ng
TCO…
#1
Start
by
understanding
your
use
cases
&
usage
paUerns
#2
Apples
to
Apples
–
Take
all
the
fixed
costs
into
considera"on
#3
Leverage
‘Cost
Aware
Architec"ng’
to
reduce
resources
#4
Include
pricing
models
(RI,
Spot)
and
economies
of
scale
65. “Based on a True Story”
Margin
Growth
54%
reduction in
unit costs
-20%
-10%
price drop RI purchase
in S3
-22%
Migration
Cassandra
to Dynamo
-18%
Price drop in
S3 of 25%
66. When
calcula"ng
TCO…
#1
Start
by
understanding
your
use
cases
&
usage
paUerns
#2
Apples
to
Apples
–
Take
all
the
fixed
costs
into
considera"on
#3
Leverage
‘Cost
Aware
Architec"ng’
to
reduce
resources
#4
Include
pricing
models
(RI,
Spot)
and
economies
of
scale
#5
Take
a
look
at
what’s
included:
Intangible
Cost
Savings
!
67. Did you know?
Free Usage Tier
Free Services
Data Transfer
AWS Elastic Beanstalk
AWS CloudFormation
AWS IAM
Auto Scaling
Consolidated Billing
No Charge for
New Customers
Amazon EC2
Amazon RDS
Amazon ELB
Amazon S3
Amazon EBS
For All Customers
Amazon SQS/SNS
Amazon DynamoDB
Amazon SES
Amazon SWF
And more…
Inbound Data Transfer
Data Transfer between
Instances within an
Availability Zone
69. A premium security spec at non-premium prices
•
VPC
•
Direct connect
and VPC
•
Dedicated instances
Network ACL
•
Identity & Access
•
Multi-Factor Authentication
Management
•
CloudHSM
S3 Encryption
•
RDS Oracle transparent
•
•
Security groups for EC2
encryption
70. DEMO
Gegng
to
Profitability
Off-loading of static content to CloudFront to reduce required
server capacity
71. So what does this mean in terms of costs?
Standard Architecture
Month
Medium EC2 instances 4
$ 485
AWS Data Transfer Out 1Tb $ 194
TOTAL
$ 679
Optimized Architecture
Month
Medium EC2 instances
1
$ 121
CloudFront Data Transfer Out 1Tb $ 168
CloudFront Requests
$1.89
TOTAL
$ 291
57% lower cost – 6 x faster