2. COST OPTIMIZATION
Johannes Borch – Solutions Architect

3. When you turn off your cloud
resources, you actually stop paying for

4. Elastic Capacity

5. Elasticity is a fundamental
property of the cloud that drives
many of its economic benefits

6. 6 am

7. 10 am

8. 25% Savings
Web Servers
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour
during a day

9. www.MyWebSite.com
(dynamic data)
Amazon Route 53
media.MyWebSite.com
(DNS)
(static data)
Elastic Load
Balancer
Amazon
Auto Scaling group : Web Tier CloudFront
Amazon EC2
Auto Scaling group : App Tier
Amazon RDS Amazon S3
Amazon
Availability Zone #1 RDS
Availability Zone #2

10. Auto scaling : Types of Scaling
Scaling by Schedule
 Use Scheduled Actions in Auto Scaling Service
• Date
• Time
• Min and Max of Auto Scaling Group Size
 You can create up to 125 actions, scheduled up to 31 days into the
future, for each of your auto scaling groups. This gives you the ability
to scale up to four times a day for a month.
Scaling by Policy
 Scaling up Policy - Double the group size
 Scaling down Policy - Decrement by 1

11. Horizontal Scaling
vs.
Vertical Scaling

12. 75% Savings
Web Servers
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
Days of the Month
during a month

13. End of the month processing
Expand the cluster at the end of the month
 Expand/Shrink feature in Amazon Elastic MapReduce
Vertically Scale up at the end of the month
 Modify-DB-Instance (in Amazon RDS) (or a New RDS DB Instance )
 CloudFormation Script (in Amazon EC2)

14. Reserved Instances

15. 3-Year RI Percentage Savings Over
On-Demand Comparison
Annual Utilization Light Medium Heavy
Utilization RI Utilization RI Utilization RI
20% 8% -14% -113%
40%
24% 26% -6%
60% 30% 39% 29%
80% 32% 45% 47%
100% 34% 49% 58%

16. Amazon EC2 Reserved Instances
for a 3-year term
Usage Fee One-time Fee Total Savings
Option 1 $4479.84 - $4479.84 -
100% On-Demand
Only
Option 2 $3030.48 $700.00 $3730.48 ~17%
50% On-Demand +
50% Reserved
(Medium
Utilization)
Option 3 $1581.12 $1400.00 $2981.12 ~34%
100% Reserved
(Medium
Utilization)
Total Cost for running four m1.small Linux instances at medium utilization
(about 366 hours per month) in the US East Region

17. 450
On Demand 1-year RI 3-year RI
400
350
300
250
200
2
150
100
50 1
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
on-demand vs. medium utilization RI

18. Recommendations
Steady State Usage : Use All Reserved
 Light Utilization RI: If you plan to use your instance more
than 32% of a 1-year term or 17% of a 3-year term.
 Medium Utilization RI: If you plan to use your instance
more than 49% of a 1-year term or 24% of a 3-year
term.
 Heavy Utilization RI: If you plan to use your instance
more than 43% of a 1-year term or 79% of a 3-year
term.

19. on-demand + reserved instances

20. Recommendations
Unpredictable Demand : Use combination of
Reserved + On-demand
 With Reserved Instances, the costs average to an effective
hourly rate up to 58% lower than the On-Demand.

21. http://d36cz9buwru1tt.cloudfront.net/AWS_Pricing_Overview.pdf

22. Instance Types

25. Basic recommendations on Instance Type
Choose the EC2 instance type that best matches the
resources required by the application
 Start with memory requirements and architecture type
(32bit or 64-bit)
 Then choose the closest number of virtual cores required
Scaling across AZs
 Smaller sizes give more granularity for deploying to
multiple AZs

26. Tip – Instance Optimizer
Free Memory
Free CPU PUT 2 weeks
Free HDD
At 1-min
intervals Alarm
Amazon CloudWatch
Instance
Custom Metrics

27. Spot Instances
Bid on unused Amazon EC2 capacity.
Run instances as long as bid exceeds the current Spot Price

29. What are Spot Instances?
Sold at Sold at
50%
Unused 54%
Unused
Discount! Discount!
Sold at Sold at
56%
Unused 59%
Unused
Discount! Discount!
Sold at Sold at
66%
Unused 63%
Unused
Discount! Discount!
Availability Zone Availability Zone
Region

30. What is the tradeoff?
Unused Unused
Unused
Reclaimed Unused
Unused
Reclaimed Unused
Availability Zone Availability Zone
Region

33. $$$$$$$$$$$$$$$$$$ $$$ $ $ $ $

37. Strategy: Optimize for Cost
• Engineered application towards a
cost
• Set low maximum bid price to
minimize costs
• Were comfortable if process ran
longer or jobs were re-run
• Did not pay for hour if they are
interrupted

38. Strategy: Discount over On-Demand
• Bid around the On-Demand price
• Use On-Demand instance when Spot
Price exceeds On-Demand price (or
slightly higher)
• May pay more some hours, but on
average they pay significantly less
• This bidding strategy ensures a
discount over On-Demand

42. Amazon SQS in Spot Architectures
VisibilityTimeOut
Amazon EC2
Spot Instance

43. Case study: Video Transcoding Workloads
(on-demand + spot + reserved instances)
Free Offering Premium Offering
 Optimize for reducing  Optimized for Faster
cost response times
 Acceptable Delay Limits  No Delays
Implementation Implementation
 Persistent Spot Requests  Invest in RIs
 Use on-demand  Use on-demand for
Instances, if delay Elasticity

44. aws.amazon.com/ec2/spot-instances

45. Bandwidth Costs

46. AWS Import / Export
Quickly move large amounts of data

47. AWS Import/Export vs. S3 costs
$1,200
$1,000
$800
$600 Import/Export
S3
$400
$200
$0
100Gb 500Gb 1 Tb 2 Tb 3 Tb 5 Tb * 10 Tb **

48. AWS Import/Export vs. S3 time savings

49. Amazon CloudFront
Cache static content

50. When am I charged?
Paris
Client
Edge Location
Client
Amazon Simple Singapore
Storage Service
(S3)
Edge Location
London
Edge Location
Client

51. When content is popular…
Paris
Client
Edge Location
Client
Amazon Simple Singapore
Storage Service
(S3)
Edge Location
London
Edge Location
Client

52. Complementary
services

53. $0.028
per hour
(small instance)
DNS Elastic Load
Web Servers
Balancer
Availability Zone
$0.095
per hour
(small instance)
EC2 instance
DNS + software LB Web Servers
Availability Zone

54. Consumers
Producer SQS queue
$0.01 per
10,000 Requests
($0.000001 per Request)
$0.095
per hour
(small instance) Producer
EC2 instance Consumers
+ software queue

55. 1. Elastic Capacity
2. Reserved Instances
3. Spot Instances
4. Instance Types
5. Bandwidth costs
6. Complementary services

56. aws.amazon.com/calculator

58. THANK YOU
aws.amazon.com