This presentation explores how customers are saving money and enabling new kinds of work with AWS today. The topics we will cover in this session will include; how the cost model changes with cloud computing, how to do detailed IT cost comparisons (TCO) for on-premise versus AWS. We’ll be joined by Mark Miller. the CEO of Tellybug, who deliver real time voting, play along and social engagement for “The XFactor”, “The Voice” and “Britain’s Got Talent”. For a couple of hours a week Tellybug is driving enough traffic to be the equivalent of the second most visited website on the internet. We’ll learn how they cope with such huge infrastructure challenges and how they manage costs. Dan Rogers, Product & Digital Marketing, AWS Matt Millar, CEO, Tellybug

1. Dan Roger, AWS Product Marketing
Agility & Cost Savings
Achieving the ‘X-Factor’

2. AWS Customers Are Realizing Long Term Benefits
Saved $34M on
SmartHub app
10’s of millions of $
saved with first 12
apps migrated to AWS
50%+
reduction in
server costs
decreased IT
operating costs
by 75%

3. In early 2012, AWS commissioned IDC to interview 11 organizations that deployed applications on AWS.
“We estimate that for
every dollar spent on
AWS, there is at least $3-
4 NOT spent on
traditional I/T”
Baird Equity Research
Analysts have proven out the results

4. Pay For Infrastructure as you Need it, Not Up Front
On-Premises

5. Demand
Q1 Q2 Q3 Q4 Q1
wasted
capacity
lost customers,
ordered hardware
wasted
capacity
wasted
capacity
wasted
capacity
200k
300k
600k
Time
Capacity of resources
Actual demand
Traditional IT = Waste or Missed Opportunity

6. Demand
AWS
With AWS match resources to demand
Q1 Q2 Q3 Q4 Q1
200k
300k
600k
Demand
Time

7. AWS Gives you an Off Switch for IT

8. 0
2
4
6
8
10
12
14
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Load
Hourly CPU Load
25% Savings
Day
Optimize by Time of Day

9. 1 5 9 13 17 21 25 29 33 37 41 45 49
WebServers
Weeks in a Year
50% Savings Weekly CPU Load
Optimize by Annual Business Cycles

10. The cost of innovation is high with Traditional IT
$250K budget
Start Over
Fund 1 Idea 6 Months
Fail

11. Experiment Often & Adapt Quickly with AWS
• Cost of failure falls dramatically
• Return on (small incremental)
Investments is high
• More risk taking, more innovation
• More iteration, faster innovation

12. 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 Tier
Get Started on AWS
with free usage & no
commitment
For POCs and getting
started
AWS offers Many Pricing Options To Fit Workloads

13. Types of Reserved Instances

14. Reserve to save
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
1 2 3 4 5 6 7 8 9 10 11 12
On-Demand
Light
Medium
Heavy
1 Year Cost:
High Memory
Extra Large
Instance
Months
On-Demand vs. 1 Year RIs
1 Month
Breakeven
2 Months
Breakeven
51%-61%
savings
Save Even More
with 3 Year RIs
Upto 76%

15. Leverage a Portfolio of Reserved Instances

16. What are Spot Instances?
• Value to the customer
 Pricing
• Up to 92% discount off of On-
Demand Instance
 Elastic
• Potential to get capacity not
otherwise available
 Minimum Commitment
• Only need to commit to 1 hour
• Tradeoff
 Potential for interruption

17. Our Scale and Low-Margin Approach is Unique
We build IT at higher scale
than most any operator of
data centers in the world
We are comfortable running a high
volume, low margin business
We pass the savings along to
our customers in the form of
low prices and continuous
reductions

18. Comparing IT costs on-premises vs. cloud isn’t easy

19. AWS Includes Everything in the Price
Hardware
Vendor
Offering

20. 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
Total
Take all the fixed costs into consideration

21. Use our TCO Calculator to Compare Costs

22. Servers Think 3-5 year time frame
Use Heavy Utilization Reserved Instances
for apples to apples comparisons
HW maintenance starts at 10%
Don’t forget your VM maintenance costs
Storage
Network
Environment
Administration

23. Utilization rarely exceeds 60%
Three copies of your data in three datacenters
with Amazon S3
Less expensive at every tier
Servers
Storage
Network
Environment
Administration

24. 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

25. 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

26. 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

27. #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 & 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
When calculating TCO…

28. Cost Optimization Tips

29. Tip 1: Pay for what you use
© 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.

30. Auto Scaling scales on demand or a schedule
© 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.

31. • 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
© 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.

32. Tip 3:
© 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.

33. Lever 3:
© 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.

34. Free Offering
– Goals
• Optimize for reducing
cost
• Acceptable Delay Limits
– Implementation
• Use Spot, if delay then use
On-Demand
• Maximum Spot Bid Price is
less than On-Demand
price
Premium Offering
© 2012 Amazon.com, Inc. and its affiliates. All rights reserved. May not be copied, modified or distributed in whole or in part without the express consent of Amazon.com, Inc.

35. Proactive Cost Optimization with Trusted Advisor

36. Getting the X Factor
Matt Millar CEO

39. 39

40. Online tap to clap in sync with show
Embeddable into broadcaster show website & twitter
Viral distribution via facebook and twitter

41. • 20 Million viewers
• Design goal 1,000,000 active viewers
– Over a 60 minute show. With acts on stage for 5
minute segments.
– Equivalent to 260bn requests/month
• But just on Saturday and Sunday nights

42. Source: http://www.google.com/adplanner/static/top1000/#
Where does
260 Billion
requests fit?

43. • Large numbers of servers for short periods of time
• Scale in seconds not hours
• Flexibility in choice
• Low cost

44. TV Traffic arrives fast

45. • Amazon Elastic Compute Cloud (Amazon EC2)
instances for proxy, cache, web, write DB
• Amazon Relational Database Service (Amazon RDS)
for our MySQL servers
• Amazon CloudFront for CDN distribution
• Amazon CloudWatch metrics (along with our own
monitoring solution)

46. Summary: Achieving the IT X Factor
• Do a TCO comparison
• Don’t pay us more than you need to (RI, Autoscale)
• Optimize with Trusted Advisor

47. Thank you!