1. COST OPTIMIZATION
Ianni Vamvadelis
Solutions Architect

2. Multiple dimensions of optimization
Cost
Performance
Response time
Time to market
High-availability
Scalability
Security
Manageability
…….

3. Elastic Capacity

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

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

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 content,
Elastic Load streaming media)
Balancer
Amazon
CloudFront
Auto Scaling group : Web Tier
Amazon EC2
Auto Scaling group : App Tier
Amazon RDS Amazon S3
Amazon
Availability Zone #1 RDS
Availability Zone #2

10. Auto scaling options
Scaling base on Policy
 Scale up and down base on metrics
 Scaling Up policy - Double the group size if avg cpu > 80%
 Scaling Down policy - Decrement by 10% if avg cpu < 30%
Scaling by Schedule
 Scheduled Actions to meet known demand
 Scheduled up to 31 days into the future
 Recurring scheduled scaling activities.

11. 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

12. Instance Types

14. On Demand

15. Choosing an Instance Type
Start with the EC2 instance type that best matches
 memory requirements
 virtual cores
Tune your instance type to optimise for cost
 No need to get it right first time
Run across AZs
 Smaller sizes give more granularity for deploying across AZs

16. Knowing your usage
Free Memory
Free CPU PUT 2 weeks
Free HDD
At 1-min
intervals Alarm
Amazon CloudWatch
Instance
Custom Metrics

17. Horizontal Scaling
and
Vertical Scaling

18. Reserved Instances

19. Optimize by using Reserved Instances
On-demand Reserved Spot
Instances Instances Instances
• Pay as you go • One time low • Requested Bid
upfront fee + Price and Pay as
lower hourly cost you go
• Starts from • $23 for 1 year • $0.005/Hour as
$0.025/Hour term and of today at 9 AM
$0.015/Hour
1-year and 3-
year terms
Heavy Medium Light
Utilization RI Utilization RI Utilization RI

20. Light Utilization RI
15-40% utilization
Lower costs up to 34%
Use Cases: Disaster Recovery, Weekly /
Monthly reporting, Elastic Map Reduce

21. Medium Utilization RI
41-79% utilization
Lower costs up to 49%
Use Cases: Web applications, many heavy
processing tasks, running much of the time

22. Heavy Utilization RI
> 80% utilization
Lower costs up to 58%
Use Cases: Databases, Large Scale HPC,
Always-on infrastructure, Baseline

23. Best RI for Utilisation
$18,000
$16,000
$14,000
$12,000
$10,000
Heavy
Medium
$8,000
Light
O-Demand
$6,000
$4,000
$2,000
$-

24. Optimizing Cost with RIs
14
12
10
On Demand
Light Utilization RI
8
Medium Utilization RI
Heavy utilization RI
6
4
2
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

25. http://aws.amazon.com/whitepapers

26. Spot Instances
Bid on unused Amazon EC2 capacity.

27. Optimize by using Spot Instances
On-demand Reserved Spot
Instances Instances Instances
• Pay as you go • One time low • Requested Bid
upfront fee + Price and Pay
Pay as you go as you go
• Starts from • $23 for 1 year • $0.005/Hour
$0.025/Hour term and as of today at
$0.015/Hour 9 AM

28. 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

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

32. Architecting for Spot Instances
Decouple Components
 Separate interactive and backend processing
Design for interruption
 Use SQS, SWF
 data in a durable store
 save progress regularly

33. Use Cases for Spot
Financial Modelling
Analytics Testing Scientific Computing
and Analysis
Geospatial Analysis Media Encoding Web Crawling Big Data

34. EMR with Spot Instances
Scenario #1 Scenario #2 #1: Cost without Spot
Job Flow 4 instances *14 hrs * $0.50 = $28
Job Flow
#2: Cost with Spot
4 instances *7 hrs * $0.50 = $14 +
5 instances * 7 hrs * $0.25 = $8.75
Total = $22.75
Duration: Duration:
14 Hours Time Savings: 50%
7 Hours Cost Savings: ~22%

35. Bidding Strategies

36. Strategy: Optimize for Cost
Engineered application towards a cost
Set low maximum bid price to minimize costs
Comfortable if process takes longer or jobs were re-run
When interrupted, no charge for that hour.

37. $$$$$$$$$$$$$$$$$$ $$$ $ $ $ $

38. Strategy: Price History Momentum
Monitor spot market price
Bid 10% above Average Spot Price of the Last Hour
Maximum bid of 80% of On-Demand Price
Expect fewer interruptions than Optimize for Cost

39. Strategy: Price History Momentum

40. 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

41. Strategy: Discount over On-Demand
Switch to Substantial
On-DemandBack Savings
Switch
to Spot
Much lower
costs than
On-Demand

42. Strategy: Minimize Interruption
~57%
Savings
On Average
Substantial
Savings

44. Complementary
services

45. $0.028
per hour
DNS Elastic Load
Web Servers
Balancer
Availability Zone
$0.095
per hour
(small instance)
EC2 instance
DNS + software LB Web Servers
Availability Zone

46. 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

47. Software v/s Services
Software on EC2 SNS, SQS, SES
Pros Pros
• Custom features • Pay as you go
• Scalability
Cons • Availability
• Requires an instance • High performance
• SPOF
• Limited to one AZ
• DIY administration

48. 1. Elastic Capacity
2. Instance Types
3. Reserved Instances
4. Spot Instances
5. Complementary services

49. Next Steps:
aws.amazon.com/economics
aws.amazon.com/calculator

51. THANK YOU