washington, d.c. the total cost of (non) ownership in the...

2013 AWS Worldwide Public Sector Summit Washington, D.C.

The Total Cost of (Non) Ownership in the AWS Cloud

Ben Butler | [email protected] | @bensbutler

Sr. Manager, AWS Marketing

2013 AWS Worldwide Public Sector Summit

AWS Platform – Go Global in Minutes


The AWS Price Reduction Philosophy

Ecosystem

Global Footprint

New Features

New Services

Infrastructure Innovation

More AWS Usage

Economies of Scale

Lower Infrastructure

Costs

Reduced Prices

More Customers

More Infrastructure


AWS Pricing Philosophy

• Pay as you go

– No minimum commitments or long-term contracts required

– Capex -> Opex

– Turn off when you don’t need it

• Pay less per unit when you use more

– Tiered Pricing and Volume Discounts

• Pay even less when you reserve

– Reserved pricing

• Pay even less as AWS grows

– Efficiencies, optimizations and economies of scale result in passing the

savings back to you in the form of lower pricing

Comparing IT costs on-premises

vs. cloud isn’t easy


AWS Includes Everything in the Price

Hardware

Vendor

Offering


Fixed Cost Factors One-time Upfront Monthly

AWS Co-lo On-Site AWS Co-lo On-Site

Server Hardware 0 $$$ $$ $$ 0 0

Network Hardware 0 $$ $$ 0 0 0

Hardware Maintenance 0 $$ $$ 0 0 0

Software OS 0 $$ $$ $ 0 0

Power and Cooling and Data Center Efficiency

0 0 $$ 0 0 $

Data Center/co-lo Space 0 $$ $$ 0 0 0

Personnel (Administration) 0 $$ $$ $ $$ $$$

Storage and Redundancy 0 $$ $$ $ 0 0

Bandwidth $ $$ $ $$ $ $

Resource Management Software 0 0 0 $$ $ 0

Take all the fixed costs into consideration


Use our TCO Calculator to Compare Costs


Servers Think 3-5 year time frame

Use Heavy Utilization Reserved Instances

for more apples to apples comparisons

HW maintenance starts at 10%

Don’t forget your VM maintenance costs

Storage

Network

Environment

Administration


Utilization rarely exceeds 60%

Eleven 9s of durability in at least 3

datacenters with Amazon S3

Less expensive at every tier

Servers

Storage

Network

Environment

Administration


Buying fixed ISP bandwidth means waste

Administration costs and hardware costs for

your network

More bandwidth gets less expensive in AWS

Redundancy for free: AWS aggregates

bandwidth from multiple Telco providers

Servers

Storage

Network

Environment

Administration


Rent, power, cooling, cabling – all that stuff

With colocation providers – you are buying less

than a full rack

Datacenters were built for last decade’s

equipment – prepare for upcharges

Servers

Storage

Network

Environment

Administration


Hardware requires specialty skillsets at premium rates

Lack of automation options = focus on provisioning resources rather than innovating

4X improvement in server to admin ratio going to AWS

Servers

Storage

Network

Environment

Administration


When calculating TCO…

1. Start with a use case or an application – compare apples to apples, capacity utilization, networking, availability, peak to average, etc.

2. Take all the costs into consideration

(Don’t forget administration, maintenance, and redundancy costs)

3. Use Updated Pricing (compute, storage, and bandwidth)

Price cuts, Tiered Pricing, and Volume Discounts

4. Use variable capacity and reserved instances where they fit the business needs

5. Intangible Costs – Take a closer look at what is built in with AWS – security, elasticity, innovation, flexibility

Cost Optimization Tips


Tip 1: Pay for what you use

When you turn off your cloud resources,

you actually stop paying for them


Auto Scaling: Demand or Schedule Based


Setting Threshold

Set Alarms


Configure Action

Take automated actions


• Review the amount of memory

and CPU

• Select an instance that

provides enough buffer to meet

your requirements

• Only scale to a larger instance

when needed


Tip 3:


http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=q33Wxc2BSwn6MM&tbnid=IxQD-rUAcdHlPM:&ved=0CAUQjRw&url=http://aiminglow.com/2012/07/money-thats-what-i-want/coin-dropping-into-piggy-bank/&ei=lnkoUovGJanQsASdroDQDw&bvm=bv.51773540,d.cWc&psig=AFQjCNFlJJk2fAG65EQU4QB4z1we2cVb9A&ust=1378470652783433


On-Demand

Pay for compute

capacity by the hour

with no long-term

commitments

For spiky workloads,

or to define needs

Reserved

Make a low, one-time

payment and receive

a significant discount

on the hourly charge

For committed

utilization

Spot

Bid for unused

capacity, charged at a

Spot Price which

fluctuates based on

supply and demand

For time-insensitive or

transient workloads

Free Usage Tier

The Free Usage Tier

can be used for

anything you want to

run in the cloud:

launch new

applications, test

existing applications

in the cloud, or simply

gain hands-on

experience with AWS.

AWS offers Many Pricing Options To Fit Workloads


Free Offering

• Goals

• Implementation

Premium Offering • Goals

- Optimized for faster response times

- No Delays

• Implementation

- Invest in RIs

- Use on-demand for elasticity

- Spot if can’t get capacity


To: AWS Customer

From: Amazon Web Services

Subject: Potential Cost Savings

Dear Customer,

We have identified $49,000 of potential

savings in your current AWS deployment.

-Amazon Web Services

To: AWS Customer



Dear Customer,




To: AWS Customer



Dear Customer,




Obsessed with Helping Customers Save Money

• AWS Trusted Advisor

– Cost optimizations

– Security & Availability checks

– Performance recommendations

• 329k Recommendations

• $290M in Annualized Savings Recommended

• $22M Acted Upon


Proactive Cost Optimization with Trusted Advisor


Resources

AWS Pricing Whitepapers

• Total Cost of (Non) Ownership of Web

Applications in the Cloud

• How AWS Pricing Works

• Reports from IDC and Forrester

Research

– http://aws.amazon.com/whitepapers

Economics Center

• Simple Monthly Calculator

– http://aws.amazon.com/calculator

• Total Cost of Ownership from 2nd Watch

– http://aws.amazon.com/tco-calculator

• 7 Reasons customers are saving $$$

http://aws.amazon.com/whitepapers

http://aws.amazon.com/calculator

http://aws.amazon.com/tco-calculator




“By providing references to S3 objects instead of downloading large datasets,

NDAR expects at least a 10x savings in data storage costs in 2014. Additionally,

access to hundreds of terabytes of data is near instantaneous, much more secure,

and provides a platform for the reuse of computational pipelines.”

-Dan Hall,

National Database for Autism Research

National Institutes of Health

Thank you!

Ben Butler, Sr. Manager, AWS Marketing

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