With Amazon EC2, you have the flexibility to mix-and-match purchasing models to suit your business needs. By combining pay-as-you-go (On-Demand), reserve ahead of time for discounts (Reserved), and high-discount spare capacity (Spot) purchasing models, you can optimize cost, grow your compute capacity and throughput, and enable new types of cloud computing applications. This presentation will guide you on how to achieve high performance and availability at the lowest TCO. We will explore how to best combine EC2's purchasing models across several common applications with immediately actionable takeaways.

1. © 2016, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Joshua Burgin, General Manager
EC2 Spot
July 2016
Get the Most Out of Amazon EC2
A Deep Dive on Reserved, On-Demand,
and Spot Purchasing Models

2. On-Demand
Pay for compute capacity
by the hour with no long-
term commitments
For spiky workloads,
or to define needs
AWS EC2 purchasing options
Reserved
Make a commitment to
receive a significant discount
on the hourly charge and a
capacity commitment
For committed utilization and
capacity reservation
Spot
Bid for unused capacity,
charged at a Spot price
that fluctuates based on
supply and demand
For flexible, fault-
tolerant or transient
workloads

3. How is cloud compute helping enterprises?
Faster time to results
Access computing
infrastructure in minutes
Lower total cost
Pay-as-you-go pricing
Elastic and powerful
Easily add or remove capacity
Globally accessible
Easily collaborate with
teams around the world
Secure
A collection of tools to
protect data and privacy
Scalable
Access to effectively
limitless capacity

4. AWS global infrastructure
Region
Edge location
Over 1 million active
customers across 190
countries
800+ government agencies
3,000+ educational
institutions
12 regions (2016: USA,
Canada, India, UK)
33 Availability Zones
54 edge locations

5. Example AWS Region
AZ
AZ
AZ AZ AZ
Transit
Transit

6. Example AWS Availability Zone
AZ
AZ
AZ AZ AZ
Transit
Transit

7. Example AWS Data Center

8. Amazon EC2 instance types
• Micro (T2)
• General Purpose (M3, M4, T2)
• Compute Optimized (C3, C4)
• Storage Optimized (I2, D2)
• GPU Optimized (G2)
• Memory Optimized (R3, X1*)
Instances to suit your application needs
*We expect to have the X1 available in the first half of 2016

9. EC2 can help strengthen your security posture
Get native functionality and tools at
no additional charge
Over 30 global compliance
certifications and accreditations
Leverage security enhancements gleaned
from 1M+ customer experiences
Benefit from AWS industry-leading
security teams 24/7, 365 days a year
Security infrastructure built to
satisfy military, global banks, and other
high-sensitivity organizations

10. More accreditations and certifications than anyone
ISO 9001
SOC 3
SOC 2
ISO 27001
ISO 27017
PCI DSS Level 1ISO 27018
SOC 1 / ISAE 3402
GxPHIPAA
ITAR
FERPA
FISMA, RMF, and DIACAP
FedRAMP
Section 508 / VPAT
DoD SRG Levels 2 & 4
FIPS 140-2
CJIS
Cloud Security Alliance
MPAA
NIST
MLPS Level 3
G-Cloud
IT-Grundschutz
MTCS Tier 3
IRAP Cyber Essentials Plus

11. The Forrester Wave™: Public cloud platform
service providers' security, Q4 2014
The Forrester Wave™ is copyrighted by Forrester Research, Inc. Forrester and Forrester Wave™ are trademarks of Forrester
Research, Inc. The Forrester Wave™ is a graphical representation of Forrester's call on a market and is plotted using a
detailed spreadsheet with exposed scores, weightings, and comments. Forrester does not endorse any vendor, product, or
service depicted in the Forrester Wave. Information is based on best available resources. Opinions reflect judgment at the time
and are subject to change.
“We work closely with AWS to develop
a security model, which we believe enables us
to operate more securely in the public cloud
than we can in our own data centers.”
Rob Alexander - CIO, Capital One

12. Enterprise customers

13. Pillars of performance and cost-optimization
Right sizing Purchasing
options
Increase
elasticity
Measure,
monitor, &
improve

14. Right sizing
Right sizing
• Selecting the cheapest instance available while
meeting performance requirements
• Looks at CPU, RAM, storage, and network utilization
to identify potential instances that can be
downsized

15. Increase elasticity
Turn off non-production instances
• Look for dev/test, non-prod instances that are
running always-on and turn off
Auto-scale production
• Use Auto Scaling to scale up and down based on
demand and usage (for example, spikes)

16. Measure, monitor, and improve: Uncover the
cost-optimization opportunities
• Auto-tag resources
• Identify always-on non-prod
• Identify instances to downsize
• Recommend RIs to purchase
• Dashboard our status
• Report on savings

17. AWS pricing principles
Pay as you go
Pay less by using more
Pay less when you reserve
Pay less when AWS grows
No up-front investment
Pay per use

18. We completed the equivalent of
thirty-nine years of computational
chemistry in just under 9 hours for
a cost of around $4200.
Steve Litster
Global Head of Scientific Computing, Novartis
”
“
Novartis: Acceleration of pre-clinical R&D
• Existing infrastructure to screen 10 million
compounds in a computational model not
available
• New infrastructure would have cost
approximately $40 million to build
Novartis used AWS for HPC computational
chemistry

19. On-Demand
Amazon EC2 purchasing options
Reserved Spot

20. EC2 On-Demand pricing
Short-term, spiky and
unpredictable
Low cost and
flexible
Develop and test

21. EC2 Reserved pricing
Upfront payments to
reduce costs
Steady state Reserved capacity

22. Reserved Instance details
Options
• No upfront
• Partial upfront
• All upfront
Commitment Level
• 1 year
• 3 year
• RI Marketplace
* Dependent on AWS service, size/type, and region

23. EC2 Spot pricing
Users with urgent
computing needs or
large amounts of
additional capacity
Time or instance
flexible
Experiment and/or
build cost-sensitive
businesses

24. Options
• Spot fleet to maintain instance
availability
• Spot block durations (1-6 hours)
for workloads that must run
continuously
Commitment level
• None
* Compared to On-Demand price based on specific EC2 instance type, region, and Availability Zone
Spot Instance details

25. Spot rules
Markets where the price of compute changes based on supply and demand
You’ll never pay more than your bid
50% bid
of OD
75% bid
of OD
25% bid
of OD
You pay the
market price
87% discount!

26. Which EC2 consumption model is right for me?

27. Have a balanced meal!
Why choose just one business model?

28. Use a combination of all three!
1. Use Reserved Instances for
known/steady-state workloads
2. Set up multiple Auto Scaling
groups
3. Scale using Spot, On-Demand, or
both
0
2
4
6
8
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
/Spot Instances
On-Demand
Spot
Reserved

29. Examples

30. Example: Three-tier web app

31. Tagging is essential!
• How do we explain the costs?
• How do we allocate the charges to
the right team?
• How do we save money?

32. Tagging is essential!

33. Stateless
Scale based on demand
Web tier
0
5
10
15
20
25
30
35
40
0 2 4 6 8 10 12 2 4 6 8 10
Web servers
Reserved Spot On-Demand
0
50
100
150
200
250
300
350
400
0 2 4 6 8 10 12 2 4 6 8 10
Web traffic

34. App tier
Stateful
Scale based on demand
0
50
100
150
200
250
300
350
400
450
500
0 2 4 6 8 10 12 2 4 6 8 10
App requests
0
5
10
15
20
25
30
35
40
45
50
0 2 4 6 8 10 12 2 4 6 8 10
App servers
Reserved On-Demand Spot block

35. Database Tier
Highly stateful
Static at peak load
0
100
200
300
400
500
600
700
800
900
0 2 4 6 8 10 12 2 4 6 8 10
Database requests
0
0.5
1
1.5
2
2.5
3
3.5
0 2 4 6 8 10 12 2 4 6 8 10
Database servers
Reserved On-Demand Spot

36. Summary: Three-tier web app
0
10
20
30
40
50
60
70
80
90
0 2 4 6 8 10 12 2 4 6 8 10
Three-tier application servers
Reserved On-Demand Spot
Summary
Have a balanced meal! Across the three tiers our
meal consist of
• Spot 13%
• On-Demand 11%
• Reserved 76%
Remember!
“No server is easier to manage than no server” -
Werner Vogels, CTO, Amazon.com

37. Ubisoft uses AWS to develop and launch social games quickly
• Ubisoft is a Paris-based gaming company, and creator of
popular gaming titles, including Assassins Creed, Far Cry,
and Just Dance
• Moving games to social and mobile platforms required
capacity to scale fast; using a traditional environment
would be an extensive and costly investment
• Using the AWS Cloud to optimize games at the application,
caching, and data layers, improving the user experience
”
“ By using the AWS cloud we
were able to launch 10 social
games within 18 months.
Lenin Gali
Senior Director, Ubisoft

38. Example: Grid processing

39. The old way: Low utilization, high costs
Time
Typical server utilization rates are low due to need to deploy for peak needs…

40. Time
The old way: Managing utilization with grids
Higher grid utilization rates result in hidden costs: longer queue wait times
and delayed results

41. The old way: In the cloud!
0
20
40
60
80
100
120
140
160
3 year Reserved Instances
?

42. The world as seen by central IT
Higher utilization can reduce IT spending…
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Grid Utilization

43. The world as seen by the business
But higher utilization also creates IT constraints…
Every job in the
queue represents
business impact
But Grid Utilization
looks great!
-600%
-500%
-400%
-300%
-200%
-100%
0%
100%
0
200
400
600
800
1000
1200
1400
Jobs in the Queue
Grid Utilization

44. Reduced Time
The cloud way: Scalability when needed
Project
Acceleration
Scale higher to reduce time to results: shorter wait times, greater agility,
faster innovation cycles

45. The new way: In the cloud!
? 0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12
Optimizing for cost and business results
3 year Reserved Instances On-Demand Spot

46. The new way: In the cloud!
? 0
100
200
300
400
500
600
1 2 3 4 5 6 7 8 9 10 11 12
Going a step further with Spot blocks!
3 year Reserved Instances On-Demand Spot block Spot

47. “We constantly understate what our capabilities are to solve problems. The
biggest constraint is never the constraint of time or money, it’s generally the
constraint of thought.”
– Jeff Smith, CEO, Suncorp Business Services
Founded: 1996 • Employees: 15,000+ • Headquarters: Brisbane, Australia
Accelerating transformation

48. EC2 purchasing options by industry

49. Web scale (e.g. Adtech)
company
Enterprise SaaS company
Consumption model by industry

50. Onboarding enterprise Gaming company
Consumption model by industry

51. Technology companyScientific research
Consumption model by industry

52. Different purchasing options in a single company
Data science
New app development Test and development
Internal IT

53. Let’s recap
Remember the pillars of optimization
Right-sizing
Increase elasticity (turn stuff off!)
Measure, monitor, and improve
Use tags to understand your services
There are 3 core purchasing options
– have a balanced meal!
Architect your workloads with
performance and cost in mind

54. Summary
Freedom to build
unfettered
Freedom to get real
value from data
Freedom to say yes
AWS is more cost-effective in both short-term and long-term than on-premises
environments. By leveraging the EC2 consumptions models you gain the…

55. Thank you!