Reducing the Total Cost of IT Infrastructure with AWS Cloud Economics

© 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Ekkarat Klinbubpa
Partner Success Manager
Reducing the Total Cost of IT
Infrastructure with AWS Cloud
Economics
ASEAN Webinar Series

© 2017, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Today’s Speaker
Ekkarat Klinbubpa
Partner Success Manager, AWS,
APAC
Helps customers optimise spend &
realise business value

Ask the AWS Experts
Our Experts are online to answer any questions
you have during the presentation.
Ask your questions via the Questions Window on
the GoToWebinar Control Panel

Coming up next at 1:30pm
Building a Case for Cloud
How to engage stakeholders across your business

Agenda
2. AWS Pricing Philosophy
3. AWS Pricing Models
4. Inputs Required to Estimate Your Bill
5. Using the Simple Monthly Calculator
1. Introduction to Cloud Economics
6. Q & A

Introduction to
Cloud Economics

Benefit Categories of Cloud Computing
Operational CostsWorkforce ProductivityCost AvoidanceOperational ResilienceBusiness Agility
• Reduced Risk
Profile/Reduced
cost of Risk
Mitigation
• Revenue & margin
improvements due
to reduced outages
• Reduced Time to
Market
• Increased
operational agility
(new market
penetration,
divestiture,
acquisition)
• Reduced cost &
increased Pace of
Experimentation
• Elimination of
hardware refresh
programs
• Elimination of
maintenance
programs
• Unit Price of
Infrastructure
• Ability to match
supply & demand
• Reinvention is
continuous – a true
efficiency dividend
• A pathway to
optionality
• An elastic Cost Base
• Transparency drives
a lean mindset
• Automation drives
maintenance
efficiencies
• Reduced cost of
planned and
unplanned outages
• Increased
Developer
Productivity

GE Oil & Gas experienced business benefits
across all categories
Operational CostsWorkforce ProductivityCost AvoidanceOperational ResilienceBusiness Agility
• 98% reduction in
P1/P0’s
• 77% faster to deliver
business applications
• 52% average TCO
savings
• 35% reduction in
compute assets (792)
• 15 automated bots
developed
• 80% cloud first
adoption
• 15 cloud services
created
• 50 applications
decommissioned
• 8 cloud migration
parties
• Improved security
posture
• Shift to self-service
culture
• Rapid
experimentation
• Reduced technical
debt
• 14M YOY Savings
• Improved
Performance
• Streamlined M&A
Activity
• DevOps in Practice
Progress
14.2M
Investment
Focus
18
Months
311 Apps
in Cloud
& 14M YOY
Savings

Typical cost drivers for on-premises
deployments, including overhead costs
Network
costs
Storage
costs
Server
costs
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 costs
Network admin costs
Overhead cost
IT labor
costs
Server admin
Virtualization admin
1
2
3
4
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.

Choose
your
hardware/
software
vendor
Server
network
hardware
OS +
Virtuali-
zation
software
DC/colo
floor
space
Power
cooling
Software-
defined
networking
Data center
personnel
HW
maint.
Storage
redundancy
Resource
mgmt. /SW
automation
AWS pricing includes overhead costs

Upgrades are your responsibility Upgrades happen automatically
On-premises infrastructure
VPC support

AWS Pricing Philosophy

How do customers lower their Costs with AWS?
Source: IDC Whitepaper, sponsored
by Amazon, “The Business Value of
Amazon Web Services Accelerates
Over Time.” December 2013
1
“Customers will have spent
63.4% more on average on-
prem or in co-location”
Remove over
provisioning and
move to pay for what
you use model
2
63 Price
Reductions
Economies of scale
allow AWS to
continually lower costs
3
Pricing model choice
to support variable &
stable workloads
4
Save more money as
you grow bigger
On-Demand
Reserved
Spot
Tiered Pricing
Volume
Discounts

Continually lowering prices for customers is in
our DNA
Reduced
Prices
More
Customers
More AWS
Usage
More
Infrastructure
Economies of
Scale
Lower
Infrastructure
Costs
Ecosystem
Global Footprint
New Features
New Services
Infrastructure
Innovation
We pass the savings along
to our customers in the
form of low prices and
continuous reductions

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

AWS Pricing Principles
Pay-as-you-go
Pay less as
you use more
Save when you
reserve

AWS Pricing Models

AWS Pricing Models
• Users that prefer the low cost
and flexibility of Amazon EC2
without any up-front payment
or long-term commitment
• Applications with short-term,
spiky, or unpredictable
workloads that cannot be
interrupted
• Applications being developed
or tested on Amazon EC2 for
the first time
• Applications with steady state
usage
• Applications that may require
reserved capacity
• Customers that can commit
to using EC2 over a 1 or 3
year term to reduce their total
computing costs
• Applications that have flexible
start and end times
• Applications that are only
feasible at very low compute
prices
• Users with urgent computing
needs for large amounts of
additional capacity
On Demand Reserved Instances Spot

Reserved Instances for Always-On Instances
Commitment level
1 year
3 year
AWS services offering RIs
Amazon EC2
Amazon RDS
Amazon DynamoDB
Amazon Redshift
Amazon ElastiCache
* Dependent on specific AWS service, size/type, and region

Introducing Convertible Reserved Instances
With a Convertible Reserved Instance, you can modify
your existing reservation across:
Instance families
Instance sizes
Operating Systems
Tenancy

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
Consider Spot for Elastic Workloads

How to Effectively leverage on
these pricing models?

Traditional Capacity Planning
Limited Value, Wasted $, Increasing Cost
Initial Fixed
Capacity
Utilization
Unused Capacity = Wasted $
Downtime, Lost Customers, Lost Revenue (Impossible to measure)
More Wasted $
Increased Capacity again
New Purchase after
“Don’t let it happen again”
Time

What levers are available to customers to drive
down costs?
Matching Supply and Demand – Right-sizing
(Compute and Storage)
Matching Supply and Demand – Elasticity
Lowering the Unit Price – Reserved and SPOT Instances

Inputs Required to Estimate
Your Bill

Pricing Metrics of Core AWS services
Most native AWS security features are
free. i.e IAM, Security Groups, NACL and
encryption
Data transfer In has no cost, while data
transfer out is charged by GB. Fixed public
IP incurs cost similar to NAT Gateway or
Bastion host which has its own cost
EC2 is priced by instance family and type,
OS and running time
Storage cost varies based on types of
AWS storage servies used. All storage
services such as EBS and S3 charge
based on capacity used in GB.
Different AWS Region has different pricing. Many AWS service offer free tier

AWS Free Tier

For Compute on EC2
For each server/instance, you will need:
• Peak vCPU
• Peak RAM
• Operating System
• Usage per month
• Target Region

Let’s take a sample…
vCPU
Peak CPU
Utilization (%)
Peak
vCPU
RAM
(GB)
Peak RAM
Utilization
(%)
Peak
RAM
OS Environment
Usage Per
Month
2 50% 4 100% Windows Production 100%
8 60% 32 80% RHEL Dev/Test 30%*
32 40% 64 50% Linux DR 1%**
64 50% 128 45% SLES Staging 24%%
128 75% 1024 75% Linux Production 100%
Compute:
All servers will be hosted in the Asia Pacific (Singapore) region.
* Dev/test environments are typically required 10 hours a day, 5 days a week. Hence, 30% of the time.
** DR environments are typically required only in case of a DR (active-passive DR strategy) or when testing the DR capabilities. We have
assumed this to be 5 hours per month. Hence, 1% of the time. When building for high-availability, many customers do not require DR
servers.

For Storage
For storage, you will needs:
• Amount of Used SSD Primary Storage
• Amount of Used Magnetic Primary Storage
• Amount of Back-up Storage
• Amount of Archive Storage

Let’s take a sample…
Storage:
• Amount of Used SSD Primary Storage – 150 GB
• Amount of Used Magnetic Primary Storage – 450 GB
• Amount of Back-up Storage – 1,200 GB
• Amount of Archive Storage – 7,200 GB
All storage will be hosted in the Asia Pacific (Singapore) region.

Using the Simple Monthly
Calculator

Demo of the SMC

Alternate Way to Consume AWS
for Simple Workloads

Lightsail: the easiest way to get started on AWS
§ Bundled compute, storage, networking
§ Fully configured server
§ Low, predictable price
§ Intuitive Lightsail console
§ Access to AWS services

What do Lightsail plans include?
CPU core(s) SSD block storage Networking &
data transfer
DNS
management
1 Static
IP/instance
Access to AWS
services

Predictable pricing starting at $5 per month

• Websites
• Web apps
• Testing environment
• Line-of-business software
Lightsail versus EC2 use cases
• Multi-tier applications (dozens of
instances)
• Anything requiring instances that
are workload optimized, highly
configurable, or resource
intensive.
• E.g., Big data analytics, High
performance computing,
Scientific computing
EC2

In Conclusion…

The move to AWS provides a platform to transform
your IT cost base
100%
30%
Today Lift & Shift Right-sizing AWS
Optimized
Apps
Move to
Higher Level
Services
Move to
Open
Source
Corporate
Apps aaS
on AWS
Migration to
Workspaces
True AWS
Optimized
Focus of initial migration
Path forward

Summary
Lowering prices for
customers is in the DNA
of Amazon and AWS
AWS Pricing Philosophy
helps take the guess
work out of capacity
planning
AWS Pricing Models offer
the flexibility you need to
optimize costs
AWS provides you with
the tool to estimate your
AWS bill
Let’s work together to
help you make the Right
decision

Thank You
You will receive today’s webinar recording and presentation deck,
look out for it in your inbox.

Reducing the Total Cost of IT Infrastructure with AWS Cloud Economics

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (20)

Similar a Reducing the Total Cost of IT Infrastructure with AWS Cloud Economics

Similar a Reducing the Total Cost of IT Infrastructure with AWS Cloud Economics (20)

Más de Amazon Web Services

Más de Amazon Web Services (20)

Reducing the Total Cost of IT Infrastructure with AWS Cloud Economics