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Cost Optimization on AWS

Moving from an on-premises environment into AWS is just the start of the journey towards cost optimization. In this session we’ll look at a range of ways in which our customers can understand their costs and increase their return-on-investment: building the business case; selecting the right models for the right workloads; benefiting from tiered pricing aggregation; using data to drive the choice of AWS services; implementation of intelligent auto-scaling; and, where appropriate, re-platforming to make use of new architectural patterns such as Serverless.

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Cost Optimization on AWS

  1. 1. P U B L I C S E C T O R S U M M I T WASHINGTO N DC
  2. 2. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost Optimization on AWS Matt Johnson Manager, Solutions Architecture Amazon Web Services 3 1 6 5 8 5
  3. 3. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Objectives for today To reduce the amount you spend on Amazon Web Services… …for your existing workloads 
  4. 4. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T What we’ll cover Cost Optimization Framework2 What Next?3 Total Cost of Ownership1
  5. 5. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Total Cost of Ownership Compares the acquisition and operating costs for running your application workloads end-to-end on-premises vs. AWS
  6. 6. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Total Cost of Ownership: Initial questions Capacity Planning 1 How do you plan for capacity? How many servers have you added in the past year? Anticipating next year? Can you switch your hardware on and off and only pay for what is used? Utilization 2 What is your average server utilization? How much do you overprovision for peak load? Operations 3 Will you run out of data center space some time in the future? What was your last year power utility bill for the data center(s)? Have you budgeted for both average and peak power requirements? Optimization 4 Are you on AWS today? Are you cost-optimized?
  7. 7. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Total Cost of Ownership: Today’s focus Capacity Planning 1 How do you plan for capacity? How many servers have you added in the past year? Anticipating next year? Can you switch your hardware on and off and only pay for what is used? Utilization 2 What is your average server utilization? How much do you overprovision for peak load? Operations 3 Will you run out of data center space some time in the future? What was your last year power utility bill for the Data Center(s)? Have you budgeted for both average and peak power requirements? Optimization 4 Are you on AWS today? Are you cost-optimized?
  8. 8. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T https://aws.amazon.com/well-architected/ AWS Well-Architected
  9. 9. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Learn AWS best practices Build and deploy faster Lower or mitigate risks Make informed decisions Well-Architected: What is it? Developed to help cloud architects build secure, high performing, resilient, and cost efficient infrastructure for their applications.
  10. 10. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well-Architected: Common design principles Stop guessing your capacity needs Automate to allow architectural experimentation Test systems at production scale Allow for evolutionary architectures Drive architectures using data Improve through Game Days
  11. 11. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well-Architected: The 5 pillars Security Reliability Performance efficiency Cost optimization Operational excellence
  12. 12. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well-Architected: Design principles General design principles Pillar-specific design principles
  13. 13. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  14. 14. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well-Architected: Cost optimization design principles Adopt a consumption model Stop spending money on datacenter operations Measure overall efficiency Analyze and attribute expenditure Use managed services to reduce TCO
  15. 15. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well-Architected: Cost optimization areas of focus Cost-effective resources Matching supply with demand Expenditure awareness Optimizing over time
  16. 16. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost-effective Resources
  17. 17. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well Architected – Cost Optimization Cost-effective resources • Managed services • Appropriate provisioning • Right-sizing • Purchasing options • Geographic selection • Optimised data transfer Matching supply with demand Usage & expenditure awareness Optimising over time
  18. 18. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well Architected – Cost Optimization Cost-effective resources • Managed services • Appropriate provisioning • Right-sizing • Purchasing options • Geographic selection • Optimised data transfer Matching supply with demand Usage & expenditure awareness Optimising over time
  19. 19. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  20. 20. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Managed services Remove the burden of undifferentiated heavy lifting • Focus on innovating rather than keeping the lights on • Inherit AWS’s approach to security, availability, performance Managed services operate at cloud scale • Can offer a lower cost per transaction or service Help reduce or retire technical debt • Move to services that are maintained by AWS • Potential to remove or reduce license costs
  21. 21. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Managed services: Compute options Amazon Elastic Container Service Amazon Elastic Container Service for Kubernetes AWS Fargate AWS LambdaAWS Elastic Beanstalk Amazon Elastic Compute Cloud (Amazon EC2)
  22. 22. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Amazon Relational Database Service (Amazon RDS) Managed services: Relational database options Amazon Athena Amazon Redshift Amazon Aurora Serverless Amazon EC2
  23. 23. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Managed services: NoSQL database options Amazon DynamoDB Amazon DocumentDB (with MongoDB compatibility) Amazon EC2
  24. 24. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Managed services: Message queue options Amazon EC2 Amazon Simple Queue Service (Amazon) SQS Amazon MQ
  25. 25. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Managed services: Takeaway What services do you currently run (either on-premises or already in AWS) that could be replaced by an AWS managed service?
  26. 26. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  27. 27. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate Provisioning Choose the right application architecture to meet your business requirements • Steady-state vs burst workloads • Consolidated vs separated workloads • Cost vs performance trade-offs Understand the requirements of adjusting the service capacity • If the time to adjust is longer than you want, consider over-provisioning • Use APIs that are integrated with monitoring tools such as Amazon CloudWatch
  28. 28. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Architectural choices Steady-state vs burst workloads • Bursting workloads often favor Serverless / Microservices architectural patterns • High throughput analytics workloads may benefit from constant compute capacity Consolidated vs separated workloads • Can you combine multiple services (i.e., multiple databases on Amazon RDS)? • Do workloads require isolation from other processes / data? Cost vs performance trade-offs • Is performance or cost optimisation the key business requirement?
  29. 29. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Serverless No Server Management Flexible Scaling High Availability No Idle Capacity
  30. 30. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Server vs Serverless Scenario 1: Constant, steady-state application workload • 16 concurrent processes running constantly • each process requiring 512 MB RAM Scenario 2: Bursty HTTPS-based API service • ~600k requests per month • 200ms and 128 MB used per request
  31. 31. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Server vs Serverless Line Item (monthly cost) Scenario 1 Scenario 2 EC2 instance (c5.large) 2 x 730 x $0.085 $124.10 2 x 730 x $0.085 $124.10 Application Load Balancer 730 x $0.0225 $16.43 730 x $0.0225 $16.43 Server-based TOTAL $140.53 $140.53 Lambda Function - Compute 16 x 730 * 36,000 * $0.000000834 $350.68 2 x 600,000 x $0.000000208 $0.25 Lambda Function – Requests 46,720 x $0.0000002 $0.009 600,000 x $0.0000002 $0.12 Amazon API Gateway – Requests N/A 600,000 * $0.0000035 $2.10 Serverless-based TOTAL $350.68 $2.47
  32. 32. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Server vs Serverless Line Item (monthly cost) Scenario 1 Scenario 2 EC2 instance (c5.large) 2 x 730 x $0.085 $124.10 2 x 730 x $0.085 $124.10 Application Load Balancer 730 x $0.0225 $16.43 730 x $0.0225 $16.43 Server-based TOTAL $140.53 $140.53 Lambda Function - Compute 16 x 730 * 36,000 * $0.000000834 $350.68 2 x 600,000 x $0.000000208 $0.25 Lambda Function – Requests 46,720 x $0.0000002 $0.009 600,000 x $0.0000002 $0.12 API Gateway – Requests N/A 600,000 * $0.0000035 $2.10 Serverless-based TOTAL $350.68 $2.47
  33. 33. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Server vs Serverless Line Item (monthly cost) Scenario 1 Scenario 2 EC2 instance (c5.large) 2 x 730 x $0.085 $124.10 2 x 730 x $0.085 $124.10 Application Load Balancer 730 x $0.0225 $16.43 730 x $0.0225 $16.43 Server-based TOTAL $140.53 $140.53 Lambda Function - Compute 16 x 730 * 36,000 * $0.000000834 $350.68 2 x 600,000 x $0.000000208 $0.25 Lambda Function – Requests 46,720 x $0.0000002 $0.009 600,000 x $0.0000002 $0.12 API Gateway – Requests N/A 600,000 * $0.0000035 $2.10 Serverless-based TOTAL $350.68 $2.47
  34. 34. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Server vs Serverless Line Item (monthly cost) Scenario 1 Scenario 2 EC2 instance (c5.large) 2 x 730 x $0.085 $124.10 2 x 730 x $0.085 $124.10 Application Load Balancer 730 x $0.0225 $16.43 730 x $0.0225 $16.43 Server-based TOTAL $140.53 $140.53 Lambda Function - Compute 16 x 730 * 36,000 * $0.000000834 $350.68 2 x 600,000 x $0.000000208 $0.25 Lambda Function – Requests 46,720 x $0.0000002 $0.009 600,000 x $0.0000002 $0.12 API Gateway – Requests N/A 600,000 * $0.0000035 $2.10 Serverless-based TOTAL $350.68 $2.47
  35. 35. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Server vs Serverless Line Item (monthly cost) Scenario 1 Scenario 2 EC2 instance (c5.large) 2 x 730 x $0.085 $124.10 2 x 730 x $0.085 $124.10 Application Load Balancer 730 x $0.0225 $16.43 730 x $0.0225 $16.43 Server-based TOTAL $140.53 $140.53 Lambda Function - Compute 16 x 730 * 36,000 * $0.000000834 $350.68 2 x 600,000 x $0.000000208 $0.25 Lambda Function – Requests 46,720 x $0.0000002 $0.009 600,000 x $0.0000002 $0.12 API Gateway – Requests N/A 600,000 * $0.0000035 $2.10 Serverless-based TOTAL $350.68 $2.47
  36. 36. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Cost Conscious Design Example: Should I use Amazon Simple Storage Service (Amazon S3) or Amazon DynamoDB? https://calculator.s3.amazonaws.com/index.html AWS Simple Monthly Calculator
  37. 37. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Cost-conscious design Request rate (Writes/sec) Object size (Bytes) Total size (GB/month) Objects per month 300 2,048 1,483 777,600,000 Scenario • Application making high number of writes per second • Need to understand the most cost-effective AWS storage service
  38. 38. Amazon S3 or Amazon DynamoDB Request rate (Writes/sec) Object size (Bytes) Total size (GB/month) Objects per month 300 2,048 1,483 777,600,000
  39. 39. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Amazon S3 or Amazon DynamoDB “…but what happens if I change the object size to 32 KB?” Request rate (Writes/sec) Object size (Bytes) Total size (GB/month) Objects per month 300 32,768 23,730 777,600,000
  40. 40. Amazon S3 or Amazon DynamoDB Request rate (Writes/sec) Object size (Bytes) Total size (GB/month) Objects per month 300 32,768 23,730 777,600,000
  41. 41. Amazon S3 or Amazon DynamoDB Request rate (Writes/sec) Object size (Bytes) Total size (GB/month) Objects per month Option 1 300 2,048 1,483 777,600,000 Option 2 300 32,768 23,730 777,600,000 use use
  42. 42. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Appropriate provisioning: Takeaway Have you selected the right architectures and associated AWS services needed to deliver each of your workloads?
  43. 43. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  44. 44. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing Use the lowest cost resources • that meet the requirements of the specific workload Iterate by adjusting the size of resources to optimize for costs • Assess the cost of modification Monitor resources and alarms to provide the data for right-sizing • Monitoring should accurately reflect the end-user experience • Select the correct granularity for the time period
  45. 45. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: Amazon EC2 instances Select the cheapest instance available • Ensure you meet performance requirements • Consider different instance families, not just sizes Analyze using CloudWatch metrics • Monitor CPU, RAM, storage, and network utilization • Identify potential instances that can be downsized • Set up custom metrics (i.e. RAM) where needed Rule of thumb: Right-size first, then reserve
  46. 46. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: Elasticity More smaller instances vs. fewer larger instances 29 m5.large @ $0.096 /hr $2,032.32 per month 59 t3.medium @ $0.0416/hr $1,791.71 per month
  47. 47. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: AWS Lambda functions Performance test your Lambda function • Lambda allocates CPU power linearly in proportion to the amount of memory configured • At 1,792 MB, a function has the equivalent of 1 full vCPU • memory usage is determined per-invoke and can be viewed in AWS CloudWatch Logs Identify if your function is memory-bound or cpu-bound • Various benchmarking tools available on GitHub Minimize your deployment package size and complexity • will reduce time that it takes for your deployment package to be downloaded • Prefer simpler frameworks that load quickly • Don't put your Lambda function in a VPC unless you have to
  48. 48. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: Amazon S3 Amazon S3 offers a range of storage classes: • Standard • Standard – Infrequent Access • One Zone – Infrequent Access • Glacier • Glacier Deep Archive • Reduced Redundancy (no longer recommended) Key points to note • Standard, Standard-IA and One Zone-IA are “real-time” storage tiers • Glacier and Glacier Deep Archive are “near-line” storage tiers
  49. 49. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: Amazon S3 Storage Options Standard Standard-IA One Zone-IA Glacier Glacier DA Storage Pricing (GB/mth) $0.023 $0.0125 $0.01 $0.004 $0.00099 Request Pricing (per 1k GETs) $0.0004 $0.001 $0.001 $0.05 $0.10 Retrieval Pricing (per GB) N/A $0.01 $0.01 $0.01 $0.02 Key points to note • Storing data in IA tiers is about 50% cheaper than in Standard tier • Request charges for IA tiers are about 60% more expensive than for Standard tier • IA tiers charge smaller objects as though they were 128 KB in size • IA tiers have a minimum storage duration of 30 days; Glacier 90 days, Glacier DA 180 days
  50. 50. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: Amazon S3 Scenario Assumptions • 1,000 objects, each 1 GB in size, are stored in Amazon S3 Scenarios • Scenario 1: every object is retrieved once per quarter • Scenario 2: every object is retrieved once per month • Scenario 3: every object is retrieved once per day What storage class should we use for each scenario? • We want to optimize for cost over a 12-month period?
  51. 51. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost components Scenario 1 Scenario 2 Scenario 3 S3 Standard Storage Cost 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 S3 Standard Request Cost 1,000 x 0.0004 x 4 $1.60 1,000 x 0.0004 x 12 $4.80 1,000 x 0.0004 x 365 $146 S3 Standard Annual TOTAL $277.60 $280.40 $422 S3-IA Storage Cost 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 S3-IA Request Cost 1,000 x 0.001 x 4 $4.00 1,000 x 0.001 x 12 $12.00 1,000 x 0.001 x 365 $365.00 S3-IA Retrieval Cost 1,000 x 0.01 x 4 $40.00 1,000 x 0.01 x 12 $120.00 1,000 x 0.01 x 365 $3,650.00 S3-IA Annual TOTAL $194.00 $282.00 $4,165.00 Right-sizing: Amazon S3 Scenarios
  52. 52. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost components Scenario 1 Scenario 2 Scenario 3 S3 Standard Storage Cost 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 S3 Standard Request Cost 1,000 x 0.0004 x 4 $1.60 1,000 x 0.0004 x 12 $4.80 1,000 x 0.0004 x 365 $146 S3 Standard Annual TOTAL $277.60 $280.40 $422 S3-IA Storage Cost 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 S3-IA Request Cost 1,000 x 0.001 x 4 $4.00 1,000 x 0.001 x 12 $12.00 1,000 x 0.001 x 365 $365.00 S3-IA Retrieval Cost 1,000 x 0.01 x 4 $40.00 1,000 x 0.01 x 12 $120.00 1,000 x 0.01 x 365 $3,650.00 S3-IA Annual TOTAL $194.00 $282.00 $4,165.00 Right-sizing: Amazon S3 Scenarios
  53. 53. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost components Scenario 1 Scenario 2 Scenario 3 S3 Standard Storage Cost 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 S3 Standard Request Cost 1,000 x 0.0004 x 4 $1.60 1,000 x 0.0004 x 12 $4.80 1,000 x 0.0004 x 365 $146 S3 Standard Annual TOTAL $277.60 $280.40 $422 S3-IA Storage Cost 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 S3-IA Request Cost 1,000 x 0.001 x 4 $4.00 1,000 x 0.001 x 12 $12.00 1,000 x 0.001 x 365 $365.00 S3-IA Retrieval Cost 1,000 x 0.01 x 4 $40.00 1,000 x 0.01 x 12 $120.00 1,000 x 0.01 x 365 $3,650.00 S3-IA Annual TOTAL $194.00 $282.00 $4,165.00 Right-sizing: Amazon S3 Scenarios
  54. 54. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost components Scenario 1 Scenario 2 Scenario 3 S3 Standard Storage Cost 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 S3 Standard Request Cost 1,000 x 0.0004 x 4 $1.60 1,000 x 0.0004 x 12 $4.80 1,000 x 0.0004 x 365 $146 S3 Standard Annual TOTAL $277.60 $280.40 $422 S3-IA Storage Cost 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 S3-IA Request Cost 1,000 x 0.001 x 4 $4.00 1,000 x 0.001 x 12 $12.00 1,000 x 0.001 x 365 $365.00 S3-IA Retrieval Cost 1,000 x 0.01 x 4 $40.00 1,000 x 0.01 x 12 $120.00 1,000 x 0.01 x 365 $3,650.00 S3-IA Annual TOTAL $194.00 $282.00 $4,165.00 Right-sizing: Amazon S3 Scenarios
  55. 55. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost components Scenario 1 Scenario 2 Scenario 3 S3 Standard Storage Cost 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 S3 Standard Request Cost 1,000 x 0.0004 x 4 $1.60 1,000 x 0.0004 x 12 $4.80 1,000 x 0.0004 x 365 $146 S3 Standard Annual TOTAL $277.60 $280.40 $422.00 S3-IA Storage Cost 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 S3-IA Request Cost 1,000 x 0.001 x 4 $4.00 1,000 x 0.001 x 12 $12.00 1,000 x 0.001 x 365 $365.00 S3-IA Retrieval Cost 1,000 x 0.01 x 4 $40.00 1,000 x 0.01 x 12 $120.00 1,000 x 0.01 x 365 $3,650.00 S3-IA Annual TOTAL $194.00 $282.00 $4,165.00 Right-sizing: Amazon S3 Scenarios
  56. 56. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost components Scenario 1 Scenario 2 Scenario 3 S3 Standard Storage Cost 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 S3 Standard Request Cost 1,000 x 0.0004 x 4 $1.60 1,000 x 0.0004 x 12 $4.80 1,000 x 0.0004 x 365 $146 S3 Standard Annual TOTAL $277.60 $280.40 $422.00 S3-IA Storage Cost 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 S3-IA Request Cost 1,000 x 0.001 x 4 $4.00 1,000 x 0.001 x 12 $12.00 1,000 x 0.001 x 365 $365.00 S3-IA Retrieval Cost 1,000 x 0.01 x 4 $40.00 1,000 x 0.01 x 12 $120.00 1,000 x 0.01 x 365 $3,650.00 S3-IA Annual TOTAL $194.00 $282.00 $4,165.00 Right-sizing: Amazon S3 Scenarios
  57. 57. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Cost components Scenario 1 Scenario 2 Scenario 3 S3 Standard Storage Cost 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 1,000 x 0.023 x 12 $276.00 S3 Standard Request Cost 1,000 x 0.0004 x 4 $1.60 1,000 x 0.0004 x 12 $4.80 1,000 x 0.0004 x 365 $146 S3 Standard Annual TOTAL $277.60 $280.40 $422.00 S3-IA Storage Cost 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 1,000 x 0.0125 x 12 $150.00 S3-IA Request Cost 1,000 x 0.001 x 4 $4.00 1,000 x 0.001 x 12 $12.00 1,000 x 0.001 x 365 $365.00 S3-IA Retrieval Cost 1,000 x 0.01 x 4 $40.00 1,000 x 0.01 x 12 $120.00 1,000 x 0.01 x 365 $3,650.00 S3-IA Annual TOTAL $194.00 $282.00 $4,165.00 Right-sizing: Amazon S3 Scenarios
  58. 58. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: Amazon S3 Rule of thumb: if you’re retrieving an object once per month or more, Standard is more cost effective storage class than Infrequent Access • Remember, storage classes can be set on a per-object basis, not just per bucket • Managing storage classes on a per-object basis can be complex and time-consuming Consider using Amazon S3 Intelligent-Tiering if you have changing or unknown access patterns • Automatically moves your data based on changing access patterns • Moves data between Standard and Infrequent-Access tiers • Additional management charge ($0.0025 per 1,000 objects per month)
  59. 59. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Right-sizing: Takeaway When was the last time you reviewed your AWS infrastructure and looked for right-sizing opportunities?
  60. 60. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  61. 61. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Purchasing options On-demand: pay per unit of capacity as used • Examples: Amazon EC2, Amazon S3 Provisioned: pay per unit of capacity as provisioned • Examples: Amazon DynamoDB, Amazon Kinesis Data Streams Reserved: discounted pricing in return for a fixed-term commitment • Examples: Amazon EC2, Amazon Elasticsearch Service Many services support multiple billing options, auto-scaling
  62. 62. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Spot Instances up to 90% off ? Reserved Instances Significant discount On-demand the second or hour Purchasing options: Amazon EC2
  63. 63. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Purchasing options: Amazon DynamoDB Provisioned capacity mode • $0.00065 per Write Capacity Unit (WCU) per hour (1 WCU = 1 x 1 KB write per second) • $0.00013 per Read Capacity Unit (RCU) per hour (1 RCU = 1 x 4KB read per second) On-demand mode • $1.25 per 1m Write Request Units (1 WRU = 1 x 1 KB write) • $0.25 per 1m Read Request Units (1 RRU = 1 x 4 KB read) Reserved capacity option (1 / 3 year commitment, 100 unit increments) • $0.000081 per WCU per hour (assuming 3 year commitment; 87% discount) • $0.000016 per RCU per hour (assuming 3-year commitment; 87% discount)
  64. 64. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Purchasing options: Amazon DynamoDB Provisioned capacity mode • Ideal for steady-state or predictably scaling workloads • Will always have a per hour cost being incurred, even with no activity On-demand mode • Use for bursty, unpredictable workloads, small-scale dev/test environments, etc. • No (transaction) charges when idle Reserved capacity option (1 / 3 year commitment, 100 unit increments) • Can be mixed with provisioned capacity mode • Reserved capacity can be shared across linked accounts in an AWS Organization
  65. 65. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Purchasing options: Takeaway Look across your AWS infrastructure for opportunities to optimize the way in which you purchase services
  66. 66. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Matching Supply with Demand
  67. 67. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well Architected – Cost Optimization Cost-effective resources Matching supply with demand • Demand-based • Buffer-based • Time-based Usage & expenditure awareness Optimising over time
  68. 68. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well Architected – Cost Optimization Cost-effective resources Matching supply with demand • Demand-based • Buffer-based • Time-based Usage & expenditure awareness Optimising over time
  69. 69. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  70. 70. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Demand-based Leveraging the elasticity of the cloud to meet demand as it changes can provide significant cost savings • programmatically vary the amount of cloud resources in your architecture dynamically • increase the number of resources during demand spikes to maintain performance • decrease capacity when demand subsides to reduce costs Within AWS this is normally accomplished using Auto Scaling • EC2 Auto Scaling: Add or remove compute capacity to meet changes in demand • AWS Auto Scaling: Configure and manage scaling for scalable AWS resources through a scaling plan
  71. 71. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Demand-based: Amazon EC2 elastic provisioning EC2 Auto Scaling allows you to: • React dynamically to changes in load • Schedule regular workloads • Optimise your instance usage • Reduce over-provisioning • No cost service! AWS Auto Scaling • Unified scaling for your cloud applications
  72. 72. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Demand-based: Takeaway Look across your workloads and consider what metrics you could use with auto-scaling to ensure capacity is closely aligned with demand
  73. 73. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  74. 74. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Time-based A time-based approach aligns resource capacity to demand that is predictable or well defined by time • typically not dependent upon utilization levels of the resources • ensures that resources are available at the specific time they are required • provided without any delays due to start-up procedures Key considerations • how consistent is the usage pattern? • what is the impact if the pattern changes?
  75. 75. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Time-based: Workload scheduling 100.0 71.4 35.7 29.8 0 20 40 60 80 100 24 x 7 24 x 5 12 x 5 10 x 5 % Running Time Up to 70% savings for non- production workloads
  76. 76. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T AWS Instance Scheduler AWS-provided solution • Custom start & stop schedules • Works with Amazon EC2 & Amazon RDS instances • Deploy using AWS CloudFormation Selectively tag instances to schedule • Multiple schedules per instance • 5-minute granularity https://aws.amazon.com/answers/infrastructure- management/instance-scheduler/
  77. 77. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Time-based: Takeaway Identify workloads that don’t need to be running 24x7, and start scheduling them appropriately
  78. 78. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Usage and Expenditure Awareness
  79. 79. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well Architected – Cost Optimization Cost-effective resources Matching supply with demand Usage & expenditure awareness • Stakeholders • Tagging • Cost attribution • Visibility & governance • Entity lifecycle tracking Optimising over time
  80. 80. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well Architected – Cost Optimization Cost-effective resources Matching supply with demand Usage & expenditure awareness • Stakeholders • Tagging • Cost attribution • Visibility & governance • Entity lifecycle tracking Optimising over time
  81. 81. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  82. 82. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Tagging Tagging provides a number of benefits • Automation (autoscaling, scheduling) • Control & compliance (IAM policies) • Cost allocation (reporting & chargebacks) Not all resources support tagging • Not all cost line-items support tagging (e.g., Data transfer charges) Other tagging gotchas • Maximum of 50 user-applied tags (not counting system tags) • Values are optional • Tags are case-sensitive
  83. 83. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Tagging: Stakeholders & examples Stakeholder Example Tag Key Example Tag Value Finance CostCenter BudgetCode Engineering EG-001 Engineering Workload Codebase Website Python Line-of-business owners Project User SuperSecretProject Alice IT BackupRegime Environment 24x7 Production Security PatchStrategy AutomationSupport Immutable True https://aws.amazon.com/answers/account-management/aws-tagging-strategies/
  84. 84. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Tagging: Using the tag editor
  85. 85. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Tagging: Enabling cost allocation tagging Enable cost allocation tags Refresh to get tag list from AWS Organizations Choose the tags to activate
  86. 86. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Tagging: Takeaway Identify and tag all existing resources across your AWS accounts, and then implement AWS Identity and Access Management controls to enforce appropriate tagging policies
  87. 87. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  88. 88. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Visibility & governance Detailed visibility into your AWS environment • identify opportunities for savings Cost optimization requires • a granular understanding of the breakdown in spend • Ability to model and forecast future spend • Having sufficient mechanisms in place to align cost and usage to business objectives AWS provides a suite of reports and tools • estimate, monitor, plan, notify, report on, and analyze your AWS spend
  89. 89. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Use Cost Explorer to identify opportunities for savings with Reserved Instances, now available for EC2, Amazon RDS, Amazon Redshift, Elasticache, and Elasticsearch. Visibility & governance: AWS Cost Explorer Comprehensive dashboards • Gain a summary view of key cost details, including month-to-date costs, month-end forecasted costs, and saved reports Automated trend analysis • Identifies anomalous cost and usage events, based on historical patterns Optimized user experience • Users of all levels of expertise in your organization
  90. 90. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Use Cost Explorer to identify opportunities for savings with Reserved Instances, now available for EC2, Amazon RDS, Amazon Redshift, Elasticache, and Elasticsearch. Visibility & governance: RI recommendations Automated purchase recommendations • Analyzes your historical usage patterns to identify potential savings Customizable parameters • Purchase RIs that fit your specific business requirements Supports multiple AWS services • Support for Amazon EC2, Amazon RDS, ElastiCache, Amazon Redshift, and Amazon Elasticsearch Service reservations
  91. 91. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Visibility & governance: AWS Budgets User experience • Simplified workflows make it easier to create and manage budgets Cost Explorer integration • Provides contextually-relevant data to help you set budgets appropriately Review budget performance • View how your actuals have performed against your budget
  92. 92. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Visibility & governance: AWS Trusted Advisor Taking away the heavy lifting of monitoring best practices • Trusted Advisor provides best practices (or checks) Red (action recommended) Yellow (investigation recommended) Green (no problem detected)
  93. 93. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Visibility & governance: Takeaway Create reports, budgets, and alarms to track spend and alert when this deviates from expected norms
  94. 94. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Optimising Over Time
  95. 95. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Well Architected – Cost Optimization Cost-effective resources Matching supply with demand Usage & expenditure awareness Optimising over time • Measure, monitor, improve • Staying ever-green
  96. 96. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Optimizing over time Measure, monitor, improve: perform a gap analysis that tells you how closely aligned your system utilization is to your requirements • Establish a cost optimization function • Establish goals and metrics • Gather insight and perform analysis • Report and validate Stay ever-green • Review your existing architectural decisions to ensure that they remain cost effective • Be aggressive in decommissioning resources, components, and workloads that you no longer require • Be aware of new managed services as they become available
  97. 97. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Optimizing over time: Takeaway Assign ownership of the cost optimization function to a team within your organization and give them the tools needed to help other teams manage their costs
  98. 98. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T
  99. 99. Optimizing TCO on AWS Instance Right-Sizing Improved Elasticity Storage Optimization Optimized Lift and Shift Measure Monitor and Improve Managed Services AWS Optimized On- Premises Lift & Shift Traditional TCO Comparisons Serverless Architecture
  100. 100. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Summary of takeaways (1) Cost-effective resources • Reduce undifferentiated heavy lifting by moving towards higher-level AWS services • Select the right Cloud-native architectures for each workload • Review your existing workloads and right-size as required • Make use of the full range of AWS purchasing models Matching supply and demand • Make use of auto-scaling to closely match capacity with demand • Schedule non-production workloads to run only when they are needed
  101. 101. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Summary of takeaways (2) Usage & expenditure awareness • Tag all of your resources to enable cost attribution • Ensure business owners have visibility into their workload costs • Create reports and budgets, and alert when they deviate from what’s expected Optimise over time • Give responsibility (and authority) for cost optimization within your organization
  102. 102. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T Useful Resources AWS Pricing  https://aws.amazon.com/pricing/ Online TCO Calculator:  https://awstcocalculator.com/ AWS Cloud Economics Center:  https://aws.amazon.com/economics/ AWS Well-Architected Framework • https://aws.amazon.com/well-architected/
  103. 103. Thank you! © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T (Please remember to complete your feedback!)
  104. 104. © 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.P U B L I C S E C T O R S U M M I T

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Moving from an on-premises environment into AWS is just the start of the journey towards cost optimization. In this session we’ll look at a range of ways in which our customers can understand their costs and increase their return-on-investment: building the business case; selecting the right models for the right workloads; benefiting from tiered pricing aggregation; using data to drive the choice of AWS services; implementation of intelligent auto-scaling; and, where appropriate, re-platforming to make use of new architectural patterns such as Serverless.

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