Learn the best practices and considerations for cost optimising your AWS environment. We will cover best practices for right sizing, scheduling instances to reduce costs, and finally, how you can save up to 75% on OnDemand costs using reserved instances.

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September 2017
AWS Cost Optimisation

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Ask the AWS Experts
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Peter Shi
Commercial
Architect
Alvin Ong
Director Product & Biz
Development
Today’s Speakers

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What is the savings
potential on AWS?

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You can significantly reduce your Total Cost of Ownership
on AWS compared to on premise infrastructure
52% saving in total cost of ownership across the fleet (GE Oil & Gas) through
rightsizing, automation, autoscaling, and storage optimisation
Jim Fowler, CIO, General Electric
… realized cost savings of 25%, more than $40,000 per year, over the cost of
leasing a data center … “We’ll never have to refresh the hardware. That
constitutes significant savings for Dow Jones,”
Stephen Orban, CTO/CIO, Dow Jones
… able to seamlessly scale our infrastructure, better serve our customers across the
globe, and reduce our fixed costs by 75% and operational costs by 83%.
Valentino Volonghi, CTO, Adroll

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How can I realise
these savings?
(technical perspective)

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The Five Pillars of Cost Optimization
Rightsizing Pick the Right
Pricing Model
Increase
Elasticity
Mechanisms for
Optimisation
Match usage to
storage class

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87%
Saving
Pillar 1: Rightsizing
m4.4xlarge
$1.72 per hr
m4.large
$0.215 per hr
2. Check (CPU,
RAM, network, disc)
1. Run 3. Resize
5. Save!4. Review Performance

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Rightsizing tools
Cost Optimization:
EC2 Right Sizing
https://aws.amazon.com/answers/account-
management/cost-optimization-ec2-right-
sizing/
AWS trusted advisor
Comes with Business and Enterprise
support

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Pillar 2: Increase Elasticity
“Hug your workloads, not your servers”

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Best practice tip for Elasticity
Non-production instances are:
1. Automatically turned off at night with manual turn-on in the morning J
2. Have scheduled on-off J
3. Excluded from turn-off by exception due to workload needs
Fun fact:
RDS can be
turned off too

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Elasticity Tools
EC2 Instance Scheduler
Semi managed option
https://aws.amazon.com/answers/infrastructur
e-management/ec2-scheduler/
Lambda Start-Stop guide
Cheap DIY option
https://aws.amazon.com/premiumsupport/kno
wledge-center/start-stop-lambda-cloudwatch/
GorillaStack
Fully managed 3rd party solution
https://aws.amazon.com/documentation/
autoscaling/
Guide to autoscaling

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Pillar 3:
Leveraging the Right
Pricing Model
Reserved Instances
On-Demand

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What are Reserved Instances (RIs)?
RIs are like discount coupon booklets
• Each RI gives one coupon per hour per instance being reserved over
the term of the RI (e.g. a 1 year RI provides 24*365 coupons)
• The coupon provides a discount in exchange for commitment
• Each individual coupon expires at the end of each hour
• RIs are a financial construct/layer on top of your AWS infrastructure
RI coupon

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RI
coverage
Total use
Key
Reserved Instances for one financial services customer
resulted in 39% decrease in unit cost
Reserved Instance
purchase

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RIs are best used for Always-On instances
(can still be used to save for non-always on)
Commitment level
1 year (approx. payback 7-8 months)
3 year (approx. payback 12-18 months)
AWS services offering RIs
Amazon EC2 & EC2 Hosts
Amazon RDS
Amazon Redshift
Amazon ElastiCache
Amazon DynamoDB (not quite RI)
Amazon CloudFront (not quite RI)

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RIs matching properties
• Instance type: m4.xlarge
• Operating System: Linux/UNIX, Windows, Windows with
SQL Server Standard, etc.
• Region: ap-southeast-2 (Sydney)
o or AZ: ap-southeast-2a
• Tenancy: Shared, dedicated

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Which RIs give greater discount?
Greater discountLess discount
All upfrontPartial upfrontNo-upfrontPayment option
3 year1 yearDuration
LinuxOthers (typically)Operating System
Newer generationsOlder generationsInstance type
StandardConvertibleClass

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Understanding Convertible Reserved Instances
With a Convertible Reserved Instance, you can modify
your existing reservation across:
Instance families
Instance sizes
Operating Systems
Tenancy

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Understanding Convertible Reserved Instances
You are committing to:
3 years (no change on conversion)
Region
EC2 on AWS
Spend (convert to equal or greater $)

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Understanding Instance Size Flexibility
• Effective March 1, your existing Regional RIs are even
more flexible!
• All Regional Linux/UNIX RIs with shared tenancy now
apply to all sizes of instances within an instance family
and AWS region.
• E.g. 1 m4.xlarge RI can apply to:
2 m4.large instances or
½ a m4.2xlarge instance

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Use Cost Explorer to track your RI utilization
(higher utilization = greater savings realization)

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Use Cost Explorer to track your RI coverage

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How do I purchase Reserved Instances?
1. Ask your account manager for a reserved instance recommendation
report
2. Decide which reserved instances you’d like to purchase
3. Purchase your reserved instances from the console & start saving
If you have >100 EC2 instances, your account manager can help

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Pillar 4:
Leveraging the Right
Storage Class
Elastic Block Store
Simple Storage Service

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Use appropriately sized EBS, you can modify if needed
with zero downtime*
* Decreasing volume size is possible, but requires a different process
Some older instances & volumes may not support zero downtime modification

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S3 Analytics provides additional functionality
over standard S3 lifecycle policies
http://bit.ly/s3analytics

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Summary: The Five Pillars of Cost Optimization
Right-Sizing Your
Instances
Pick the Right
Pricing Model
Increase
Elasticity
Mechanisms for
Optimisation
Match usage to
storage class

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How can I realise
these savings at scale?
(strategic perspective)

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Mechanisms for
Optimisation

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Assigned optimisation responsibility or
Establish a Cloud Center of Excellence
• Optimisation strategy
(incl. reserved instances)
• Supporting optimisation activities
• Optimisation reporting

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Organisational Metrics of Optimisation
Dimension Target Score
(org level or BU level)
Savings impact p.m.
(justifies investment)
Enterprise Programs 100% 100% $100k
Reserved Instance Coverage 70% 65% $52k
Reserved Instance Utilisation 95% 97% ($2k)
EC2 Spot 5% 2% $2k
Cloud native services (e.g. Lambda) 5% 1% $9k
Tagging and cost allocation 90% 85% N/A
Rightsizing % 95% 99% $20k
EC2, RDS Elasticity 50% 55% $250k
EBS Storage % of EC2 Instances 90% 85% $15k
S3-IA % of S3 20% 25% $6k
Targets met 5 of 10 $452k (50% of bill)

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Developer targeted dashboards
Time (months)
%
Linux/Unix
instances

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Enabling & encouraging teams to architect for cost

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Assign ownership through tagging
Tagging -> Allocation -> Chargeback -> Ownership

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AWS Tooling Demo

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EdgeProp.my’s Story

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EdgeProp.my is a property portal in Malaysia with
proprietary news, listings and analytic tools
• Founded in 2015
• Currently serving >300,000
users per month
• Goal is to simplify
property search process
by empowering its users
with proprietary tools and
data to make better
informed decisions

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Trade-off: cost vs flexibility; Solution: RI
• Trade-off decision – cost vs
flexibility
• Started using RI in August 2017
mainly for production server
(which accounts for 80% total
server cost)
• Achieved cost reduction of
~30% while maintaining
reasonable amount of flexibility
Cost Flexibility

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Any final words of wisdom for customers on cost
optimisation?
As new products come out
it’s better to try it sooner
Use a scheduler to
shut down and start
Dev and UAT

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10 minute open Q&A

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