How serverless changes the cost paradigm
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One of the key characteristics of serverless components is the pay-per-use pricing model. For example, with AWS Lambda, you don’t pay for the uptime of the underlying infrastructure but for the no. of invocations and how long your code actually runs for. This important characteristic removes the need for many premature micro-optimizations as your cost is always tightly linked to usage and minimizes waste. As a result, many applications would run at a fraction of the cost if they were moved to serverless. The pay-per-use pricing model also enables more accurate cost prediction and monitoring based on your application’s throughput. This gives rise to the notion of FinDev, where finance and development can intersect and allows optimization to be targeted to give the optimal return-on-invest on the engineering efforts. And by building your application on serverless components, you can also leverage it as a business advantage and offer a more competitive, usage-based pricing to your customers. Which is going to be crucial at a time when businesses all around the world are affected by COVID and are looking for better efficiencies. In this webinar, we will cover topics such as: - How does the cost of serverless differ from serverful applications? - How to predict and monitor cost in serverless applications? - When should you optimize for cost? - How can you leverage usage-based pricing as a business advantage?
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How serverless changes the cost paradigm
- 2. Yan Cui http://theburningmonk.com @theburningmonk Developer Advocate @ Independent Consultant AWS user since 2009 since 2018 yan@lumigo.io
- 3. Uri Parush @uri82042753 System Architect @ uri@lumigo.io
- 4. “Serverless”
- 6. Gojko Adzic It is serverless the same way WiFi is wireless. http://bit.ly/2yQgwwb
- 7. Serverless means… don’t pay for it if no-one uses it don’t need to worry about scaling don’t need to provision and manage servers
- 8. in other words, it’s a lot like taking a cab
- 9. Ownership Fuel Navigate To get there! Focus on getting there!
- 11. API Gateway IOT Core SNS SQS S3
- 12. HW Ownership OS Runtime & Scale Code Focus on business logic! Physical Servers Virtual Machines Containers Serverless
- 17. scales to zero
- 18. scales to zero don’t pay for idle
- 19. Serverless means… don’t pay for it if no-one uses it don’t need to worry about scaling don’t need to provision and manage servers
- 25. idea production choose language + framework master language + framework figure out deployment configure AMI configure ELB configure autoscaling capacity planning over-provision for launch are we doing microservices? configure CI/CD
- 26. idea production choose language + framework master language + framework figure out deployment configure AMI configure ELB configure autoscaling capacity planning over-provision for launch are we doing microservices? configure CI/CD
- 27. idea production greater Velocity from idea to product
- 28. youtube.com/watch?v=evsz__BDprs It used to take me longer to configure infrastructure for my application!
- 31. AppSync DynamoDB
- 32. Lambda
- 34. what used to takes teams of engineers to achieve over months can now be done by individuals over a matter of weeks
- 36. Yan Cui I’m not a great programmer; I just build my app on services that great programmers built.
- 39. Thinking about serverless costs the right way
- 41. Model Training Low-latency Prediction Serving via Batching
- 43. yes, some workloads will be more expensive to run on serverless
- 44. yes, some workloads will be more expensive to run on serverless from the infrastructure cost perspective
- 47. what businesses care about what we can easily measure
- 48. what businesses care about what we can easily measure what most of our budget is spent on
- 49. AWS bill per month serverless containers $500 $100
- 50. Staffing cost per month $10000 $0 AWS bill per month serverless containers $500 $100
- 51. Don’t be “penny-wise, pound foolish”
- 52. Always think of cost in terms of Total Cost of Ownership
- 54. Simon Wardley https://blog.gardeviance.org/2016/11/why-fuss-about-serverless.html the new business models around worth based development and the collision of finance and development will literally knock your socks off. Which is why the moniker "FinDev". Beyond the initial investment in coding, I can create an almost variable cost business model and redirect investment to maximise returns in ways that most of you have never experienced. I know, I’ve been there.
- 55. Simon Wardley https://blog.gardeviance.org/2016/11/why-fuss-about-serverless.html and redirect investment to maximise returns in ways that most of you have never experienced.
- 56. “what’s the ROI for a feature X?”
- 58. how much time does it take to build? how many engineer does it take to build?
- 59. how much does it cost to run it?
- 60. $5/hr $5/hr 1 TPS 1000 TPS $0.00138888888 per transaction $0.00000138888 per transaction actual cost per transaction depends on usage, which is outside your control
- 61. TPS Cost/Transaction add server add server add server add server
- 62. $5/hr ? TPS runs multiple services/features how do you attribute the cost for each feature?
- 63. understanding the operational cost for individual features are very difficult
- 64. unless you know exactly how much each transaction would cost you
- 65. AppSync DynamoDB
- 66. API Gateway Lambda DynamoDB $0.0000035 $0.0000004083 $0.00000125 cost per transaction: $0.0000051583
- 69. more CPU more network more expensive
- 70. Donald Knuth We should forget about small efficiencies, say about 97% of the time: premature optimization is the root of all evil.
- 71. We should forget about small efficiencies, say about 97% of the time: premature optimization is the root of all evil. Yet we should not pass up our opportunities in that critical 3%. Donald Knuth
- 72. input output engineering time lower operational cost to run the feature
- 73. input output engineering time lower operational cost to run the feature this is pretty $$$
- 75. cost of the conversation: ~$50 per dev per hour x 8 = $400 potential saving: $10/month
- 76. cost of the conversation: ~$50 per dev per hour x 8 = $400 potential saving: $10/month break-even time for conversation: $400 ÷ $10/month = 40 months!!!
- 77. Donald Knuth We should forget about small efficiencies, say about 97% of the time: premature optimization is the root of all evil. Yet we should not pass up our opportunities in that critical 3%.
- 78. optimization is as much an engineering decision as it is a financial decision
- 79. choose wisely.
- 91. lumigo-cli powertune-lambda -r us-east-1 -n cpu-bound-example -s balanced
- 92. lumigo-cli powertune-lambda -r us-east-1 -n cpu-bound-example -s balanced
- 96. more CPU = shorter execution time
- 97. shorter execution time = cheaper
- 100. IO-bound functions don’t see drastic improvements with more memory
- 105. In 2019, the tourism industry in the UK generated 9% of its GDP and employed 2.6 million jobs
- 107. consumers have less disposible income B2C businesses have less revenue
- 108. consumers have less disposible income B2C businesses have less revenue B2B businesses have less revenue
- 109. consumers have less disposible income B2C businesses have less revenue B2B businesses have less revenue job losses/furloughed
- 110. consumers have less disposible income B2C businesses have less revenue B2B businesses have less revenue job losses/furloughed
- 112. Businesses have to become more efficient or die
- 113. “get more done with less”
- 116. Simon Wardley https://blog.gardeviance.org/2016/11/why-fuss-about-serverless.html the new business models around worth based development and the collision of finance and development will literally knock your socks off. Which is why the moniker "FinDev". Beyond the initial investment in coding, I can create an almost variable cost business model…
- 117. API Gateway Lambda DynamoDB $0.0000035 $0.0000004083 $0.00000125 cost per transaction: $0.0000051583
- 122. £ subscription fee percentile what the customer has cost you
- 123. £ subscription fee percentile 80% profit! loss… what the customer has cost you
- 125. £ time your premium what you charge your customer what the customer has cost you
- 127. A pure pay-per-use play is difficult to pull off
- 128. Not everything in your stack is pay-per-use
- 129. AppSync DynamoDB
- 130. Factor fixed-cost components into your margin
- 131. Mix subscription with pay-per-use
- 132. time your profit what you charge your customer what the customer has cost you subscription fee £
- 133. £ time your profit what you charge your customer what the customer has cost you subscription fee competitor’s subscription fee
- 135. Enterprises want predictable pricing
- 136. Offer enterprise pricing options
- 139. what businesses care about what we can easily measure what most of our budget is spent on
- 140. Always think of cost in terms of Total Cost of Ownership
- 143. optimization is as much an engineering decision as it is a financial decision
- 144. We should forget about small efficiencies, say about 97% of the time: premature optimization is the root of all evil. Yet we should not pass up our opportunities in that critical 3%. Donald Knuth
- 145. £ time your premium what you charge your customer what the customer has cost you