The Cloud provides a transparent cost model, with options from on-demand provisioning, to reserved capacity to low cost, spot pricing. This session outlines how to use these pricing models in concert to optimise the running cost of your application on the AWS Cloud. We'll outline new utilisation based reserved instances and bidding strategies when running on spot instances, to cost prediction.

1. COST OPTIMIZATION
Glen Robinson– Solutions Architect

2. Elastic Capacity

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

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

5. 6 am

6. 10 am

7. 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

8. 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

9. 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

10. Horizontal Scaling
vs.
Vertical Scaling

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. 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)

13. Reserved Instances

14. Reserved Instances
New Reserved instances
 Light Utilization
 Medium Utilization
 Heavy Utilization

15. Light Utilization RI
15-40% utilization
Lower costs up to 33%
Use Cases: Disaster Recovery, periodic
processing (e.g. EMR)

16. Medium Utilization RI
The old RI
41-79% utilization
Lower costs up to 49%
Use Cases: Web applications, many heavy
processing tasks

17. Heavy Utilization RI
> 80% utilization
Lower costs up to 59%
Use Cases: Databases, Large Scale HPC,
Always-on infrastructure, Baseline

18. Optimizing Cost with RIs
$18,000
$16,000
$14,000
$12,000
$10,000
Heavy
Medium
$8,000
Light
O-Demand
$6,000
$4,000
$2,000
$-

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

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

21. Instance Types

24. 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

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

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

27. 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

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

31. Bidding Strategies

32. 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

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

34. Strategy: Price History Momentum
Price Set 10% above Average Price Last Hour
Maximum price threshold of 80% of On-Demand Price
One time spot requests; one instance per request; across all
availability zones
Not more than 10 open Spot requests at any time
Spot requests expire in 10 minute

35. Strategy: Price History Momentum

36. 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

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

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

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

42. Complementary
services

43. $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

44. 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

45. 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

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

47. aws.amazon.com/calculator

49. THANK YOU
aws.amazon.com