aws december 2015 webinar series - strategies to quantify tco & optimize costs w/ aws

© 2015, Amazon Web Services, Inc. or its Affiliates. All rights reserved.

12/8/2015

Strategies to Quantify TCO and Optimize Costs using AWS

Amilcar Alfaro, Product Marketing Manager, AWSGary Mikula, Sr. Director of Info Sec Engineering, FINRA

AWS empowers organizations to rethink how to manage their business infrastructure

With AWS you can…

Scale Based on Market

Needs Increase Innovation and

Experimentation Leverage what you

already own

What we’re focusing on today

Framing the value of AWS

AWS & Lower Costs

Optimize Costs to drive Value

How to frame the value of moving to AWS? Start with your goals

“We need to focus on moving our core business forward — not building and

maintaining infrastructure…”

“Reducing our overall cost is a high priority.”

“We are looking to improve performance and expand globally in a flexible way.”

Macro goals to move

Source: IDC, Quantifying the Business Value of Amazon Web Services (May, 2015)

Analysts have shown AWS Creates Value

Let’s Dive Deep in Costs

Comparing TCO is not easy

≠

Lower costs than on-premises

On-premises traditional data center

On-premises virtualizeddata center

CAPEX

OPEX

OPEX

AWS

CAPEX

OPEX*

Cost savings from running internal IT more efficiently AWS scale

• Multiple new data centers built each year• Volume purchasing, highly automated, supply

chain optimization

Utilization fundamentally higher in AWS cloud• Aggregating non-correlated workloads, scale,

spot market

Amazon specific hardware designs• OEM acquisition of custom servers and

net gear• Direct purchasing of disk, memory, and CPU • AWS controlled hypervisor and net protocol

layers

Diagram is not to scale*For AWS, OPEX costs includes Reserved Instances one-time low, up-front payment, if Reserved Instances are used.

Cost savings from moving to a public cloud provider

Typical cost drivers for on-premises deployments, including Overhead Costs

Networkcosts

Storagecosts

Servercosts

Hardware – server, rack chassis PDUs, ToR

switches(+maintenance)

Software - OS, virtualization licenses

(+maintenance)

Overhead cost

Space Power Cooling

Hardware – storage disks, SAN/FC switches

Overhead cost

Storage admin costs

Network hardware – LAN switches, load balancer

bandwidth costsNetwork admin costs

Overhead cost

IT laborcosts

Server adminVirtualization admin

Space Power Cooling

Space Power Cooling

illustrative

Diagram doesn’t include every cost item. E.g. software costs can include database, management, middle tier software costs. Facilities cost can include costs associated with upgrades, maintenance, building security, taxes etc. IT labor costs can include security admin and application admin costs.

1

2

3

4

Traditional Capacity PlanningLimitations of traditional data centers:

Inflexible physical assets Costs are never in sync

Migration and expansion costs are high

Cost of unexpected inefficiencies

Elastic and Pay-Per-Use Infrastructure

Unable to serve

customers

InfrastructureCost $

time

LargeCapital

Expenditure

OpportunityCost

PredictedDemand

TraditionalHardware

ActualDemand

AutomatedVirtualization

TCO Calculator Demo

Even after initial deployment, AWS continues to drive down

costs

Upgrades are your responsibility

Upgrades happen automatically

On-premises infrastructure

With AWS, Service Upgrades occur automatically

VPC support

NEW

Do-it-yourself MySQL replication

Potentially ~100+ manual steps

Set up primary and standby instancesSet up identical volumesCreate synchronous replicationCreate and manage DNS entriesDetect instance failure conditionsDetect network failure conditionsDetect storage failure conditionsDecide when to fail over….Re-establish primary secondary connections.

Amazon RDS Multi-AZ

HA with a mouse click

Managed services eliminate many operational tasks

Introducing EC2 Dedicated Hosts

Its a physical server with EC2 instance capacity dedicated for your use

Enabling Bring Your Own License (BYOL)Provides necessary visibility into physical resources

• Physical core and socket counts per host• Instance utilization per host• Instance positions per host

Granular placement controls enables you to reuse the same physical Host

Host ID = h-123abcSockets = 2Physical Cores = 20

One Customer saved 42% by using their own licenses

Transparency in Cloud ComputingProviding Real-Time AWS Cost Management

FINRA Information Security Engineering Copyright 2015 FINRA

FINRA – Who We Are

• FINRA—the Financial Industry Regulatory Authority—is an independent, nongovernmental regulator for all securities firms doing business with the public in the United States

• FINRA protects investors by regulating brokers and brokerage firms and by monitoring trading on US stock markets

• FINRA monitor over 6 billion shares traded on the stock market each day

• FINRA handles more “big data” on a daily basis than the Library of Congress or Visa®—to build a holistic picture of the trading market

• FINRA: Deter, Detect, Discipline

Investor Protection


Challenges and Keys to Success

• Inefficient Quarterly Financial Reviews• Spending is real-time• Repeat process again in 3 months

• Project Managers Lack Visibility• What am I spending?• Am I below budget?• Am I being held accountable?

• Billing Reports Alone Are Insufficient• Over 10 million line items• No correlation

Cost management must be continuous,

not quarterly

Visibility must be extended to individual

project managers

Cost must be granularly correlated to other data sources


Approach Chosen• Cloud Cost Management is:

• A Discipline not a right• Best addressed distributively

• Use Splunk Cloud as Process / Delivery System• Ability to Collect, Analyze, Visualize

• Collect AWS Billing Data in Splunk• Detailed line items with resources and tags

• Data Enrichment• Project code lookups• Forecast projections• Billing adjustments

• Build Interfaces


How We Did It


FINRA AWS Project Management Billing App


Immediate Impact

• Focus on Low Hanging Fruit• Shutting down services over weekends / evenings• Storage sun setting / dormant EC2• Identify AWSs services with highest spending• Identify projects over budget

• Immediate Results• Quantifiable cost savings• Better tracking to forecast

• Better Forecast Projections• Feedback and control


Gaining Transparency Into Amazon EMR

What Stood in Our Way• PaaS and IaaS Are Not Equal• Instance Fingerprinting

• Identify Nodes• Instance Role• User Tags

• Data Retention• Collection Delay• Bootstrap Splunk Agent


EMR Cluster Analyzer –> Summary Dashboard

AWS Billing

Splunk for *NIX

Select the Cluster

Jobs Running


Potential EC2 Provisioning Cost Savingsm1.xlarge

• 4 vCPUs with 8 ECUs• 15 GB memory• 4 x 420 GB disk• $0.35 per hour

c3.xlarge• 4 vCPUs with 14 ECUs• 7.5 GB memory• 2 x 40 GB disk (SSD)• $0.27 per hour

Potential 23% Savings in EMR

Costs

With additional ECUs and SSD disks, the c3.xlarge may be more performant than the m1.xlarge instances at a better price pointRESIZING***


Resizing Analysis

Summary providesthe information on number of nodes

1. Less than 80% utilization overall

2. After 70 mins utilization at less than 50% (cpu)

Conclusion:The cluster be resized after the two hours


Resizing Analysis – Scenario 1

1st Hour 2nd Hour 3rd Hour 4th Hour40 40 40 40

Cost Analysis:

Cost = (Price per Instance) * (No. of Instances) * (No. of Hours)

Price = 0.35 * 40 * 4 = $56

All instances running for full duration of the job


Resizing Analysis – Scenario 2

1st Hour 2nd Hour 3rd Hour 4th Hour40 35 20 20

Cost Analysis:

Cost = (Price per Instance) * (No. of Instances) * (No. of Hours)

Price = (0.35*40*1) + (0.35*35*1)+(0.35*20*2) = 14 + 12.25 + 14 = $40.25

Savings Compared to Scenario 1 = 28.2%

Resizing after the 1st hour and 2nd hour


Combined EC2 Provisioning and Resizing Analysis

• Combined Savings• Original Cost = $56• Price After Combined Analysis = $31.05• Job Savings = $24.95 = 55.44%

• Job Runs 5x / Day ( $24.95 * 5 = $124.75 )• Every Business Day / Week ( $124.75 * 5 = $623.75 )• Every Week of the Year ( $623.75 * 52 = $32,435 )• And….We Haven’t Affected Performance

• Just More Efficient Provisioning


Future Directions• File Processing

• Back Tagging• More Drill Down Analytics• Duplicate EMR Success• EMR Cluster Grading • User Defined Alerting• Splunk IT Service Intelligence Integration• https://www.youtube.com/watch?v=eaNtpgjyUdY


With AWS you can more easily...

Move Quickly

Hit Your Deadlines

More Time to Focus on What Differentiates Your

Business

Faster Turns

Fewer Long and Large Projects

Long & Large Projects

More likely to exceed budget

More likely to run late

More likely to fail to deliver full value


Each additional year in a project boosts the likelihood of missing targets by 15%


$66 Billion in Cost Overruns in 5,400 projects

How much can you save?

Experiment and Lower Risks

Putting It All Together

The Value of Using AWS Accelerates Over Time

Source: IDC Business Value of AWS Accelerates over time

According to IDC, this relationship between length of time using AWS and return is due to customers leveraging the more optimized environment to generate more applications along a learning curve.

$1 Investment in AWS

$8.40 in benefits

At 60 Months of using AWS

~8X$3.50 in benefits

$1 Investment in AWS

At 36 Months of using AWS

~3X

http://media.amazonwebservices.com/IDC_Business_Value_of_AWS_Accelerates_Over_time.pdf

What to do Next ?

Cloud Centerof Excellence

Leverage AWS Global Footprint

AWS’s 11 Regions

30 Availability Zones

50+ Services

And hundreds of innovations can help you

So this will result in

Lower Costs

Increased Agility

The ability to scale based on market needs

Innovate around YOUR unique value

Leverage what you already own

If you need extra help…

AWS has tens of thousands of APN partners and Marketplace has 2,300 software listings in over 30 categories

Web links for more information

AWS Economics Center: • aws.amazon.com/economics• Includes link to TCO Calculator

Case Studies & References:• aws.amazon.com/solutions/case-studies

aws december 2015 webinar series - strategies to quantify tco & optimize costs w/ aws

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