Advanced cost management strategies in AWS

© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
BENGALURU

Advanced Cost Management
Strategies in AWS
Mani Chandrasekaran
Solutions Architect, AISPL
https://www.linkedin.com/in/cmanikandan
https:///twitter.com/cmani

© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.© 2018, Amazon Web Services, Inc. or Its Affiliates. All rights reserved.
What can you do to
spend less on AWS?
How AWS Helps
You Realise Value
and Save Cost
Avenues for
Support

How AWS Helps You
Realize Value and Save Cost

Well Architected Pillars
Security: The ability to protect information, systems, and assets while
delivering business value through risk assessments and mitigation strategies.
Reliability: The ability of a system to recover from infrastructure or service
failures, dynamically acquire computing resources to meet demand, and
mitigate disruptions such as misconfigurations or transient network issues.
Performance Efficiency: The ability to use computing resources efficiently to
meet system requirements, and to maintain that efficiency as demand
changes and technologies evolve.
Cost Optimization: The ability to avoid or eliminate unneeded cost or
suboptimal resources.
Operational Excellence: The ability to run and monitor systems to deliver
business value and continually improve supporting processes and procedures.

© 2018, Amazon Web Services, Inc. or Its Affiliates. All rights reserved.
90%+ of our roadmap is based on customer asks.
AWS has “lots” of engineers building your requested features
1430
0
500
1000
1500
2012 2013 2014 2015 2016 2017
Significant services and features released

AWS lets you eliminate waste
Before we had to peer 3-5 years into the future
AWS allows you to meet demand to the second!

AWS has lowered prices for customers
67 times since 2006

AWS shares how to save cost
AWS re:Invent 2016: Cost Optimizing Your Architecture:
Practical Design Steps For Savings (ARC310)

Data TransferReal Estate
Facilities
Power
You pay for fewer things on AWS and gain access to
Serverless technology
On-premises
AWS highly
optimised
~90%
Less Cost
Networking
SAN
Servers
Storage
Hypervisor
Operating System
Application
AWS + basic
optimisation
~20-40%
Less Cost
EBS (Block Storage)
S3 (Object Storage)
EC2 (Servers)
Application
Serverless
Application

What is it?
Launch of new
products 75% faster
(Unilever)
60% reduced downtime
(Trainline)
50%+ reduction in
TCO (GE)
Over 500 hours per year
of server configuration
time saved (Sage)
Examples
Infrastructure cost
savings / and cost
avoidance
Efficiency improvement
by function on a task by
task basis.
Improved SLA times &
reducing unplanned
outage.
Deploy new features /
applications faster and
reduce errors.
Typical
Focus
Further Cloud
Benefits
Cost Savings
(TCO)
Staff
Productivity
Business
Agility
Operational
Resilience
The Economic Benefits of Cloud extends well beyond
cost savings and avoidance

What can you do to spend less?

Technical Pillars of Spending Less
1. Right Size 4. Reserved
Instances
2. Increase
Elasticity
5. Design for Cost
Efficiency
3. Spot
Instances

87%
Saving
1. Right Sizing is about selecting the cheapest
resource for what you need
m4.4xlarge
$1.72 per hr
m4.large
$0.215 per hr
2. Check (CPU,
RAM, network, disc)
1. Migrate/provision
& Run
3. Right Size
5. Save!4. Review Performance

• AWS CloudWatch (manual)
• AWS Trusted Advisor (with AWS Business Support)
• 3rd party paid tools (including but not limited to)
• Open source tools
• Cost Optimisation: EC2 Right Sizing
https://aws.amazon.com/answers/account-management/cost-
optimization-ec2-right-sizing/
Tools for Right Sizing and finding unused resources

2. Elasticity can reduce non-production spend by
70% or more via scheduling
Fun fact:
RDS can be
turned off too
Save even more by automatically turning resources at night
and manually turn them on in the morning

AWS Auto Scaling helps you match resources to
demand
1 x 24 hours m5.2xlarge @
$0.48/hr. on Linux in Sydney
= $8,294.40 / month
Autoscaling 51 m5.large instances
@ $0.12/hr. on Linux in Sydney
= $4,406.40 / month (47% saving)
Demand
$

• Guide to Auto Scaling
https://aws.amazon.com/documentation/autoscaling/
• AWS Instance Scheduler
https://aws.amazon.com/answers/infrastructure-
management/instance-scheduler/
• 3rd party paid tools (including but not limited to)
Tools for Increasing Elasticity

3. EC2 Spot provides heavily discounted (typically
75% up to 90%), spare compute capacity at scale
Using EC2 spot is a pricing and architectural best practice and decision.

Rendered on Amazon EC2 Spot Instances
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
vCPU hours
OD
SP

Spot Instances: Use Cases
Big data
Containers &
test/dev
HPC & batch Web Services
FINRA has saved up to 50%
from its on-premises
solution, increased
elasticity/scalability, and
accelerated reprocessing
requests from months to
days with EC2 Spot
Instances
Yelp runs millions of tests
every day with EC2 Spot
Instances. Yelp improved
test result response time
from 2 days to 30 minutes
and has also delivered a
large reduction in execution
costs with Spot.
TLG Aerospace saw a 75%
reduction in the cost per
CFD simulation with
Amazon EC2 Spot Instances.
They were able to pass
those savings along to their
customers and be more
competitive.
AdRoll have been able to
seamlessly scale their
infrastructure, better serve
customers across the globe,
and reduce our fixed costs
by 75% and operational
costs by 83%.with AWS
solution, including EC2 Spot
Instances

Example – Strike a Balance
§ Set your Spot price > Market < On-Demand
§ Will always give you the market rate
at or under your bid
§ CloudWatch alarm on number of Spot
Instances in group
§ GroupInServiceInstances
§ Scale On-Demand group if #Instances in
Spot group drops below threshold
On-Demand
Auto Scaling
group
Master Node
Spot
Auto Scaling
group
Weather forecast raw data
Compute
Nodes

AWS
CloudFormation
AWS
OpsWorks
Amazon
EMR
Amazon
ECS
AWS Data
Pipeline
AWS BatchAuto Scaling
Amazon EC2 Spot Integrations

How often Spot Instances get Interrupted ?
<5%
With Average Savings 80-90%

New Spot Instance Advisor
ü Shows your savings
over On-Demand
ü Helps you select pools
with the least chance of
interruption
https://aws.amazon.com/ec2/spot/instance-advisor/

Tools for EC2 Spot
• AWS EC2 Fleet & Spot Fleet
• AWS Spot Block (up to 6 hrs of Spot)
• Spot Instance Advisor
• Spot start-stop and hibernate (feature)
• 3rd party paid tools (including but not limited to) like
SpotInst

4. Reserved Instances (RIs) provide discount for commitment
and are leveraged by almost all mature customers
Elastic workload works
well with On-demand or
EC2 Spot
Base workloads can be
discounted through RIs.
RIs provide up to 75% discount,
and typically 20-40% discount for
a 1 year commitment
$
1 Jan 31 Dec

What are Reserved Instances (RIs)?
• RIs are a commitment in exchange for discount
• They behave like discount coupon booklets
• Each hourly RI coupon in the booklet tries to match to a
running instance, if matched it provides its full discount, if not
it expires
• RIs are a financial construct/layer on top of your AWS
infrastructure
RI coupon booklet

Convertible RI benefits
Convertible RIs allow changes in:
Instance Families (e.g. m4. -> c5.)
Instance sizes (e.g. .large -> .xlarge)
Operating System (e.g. Linux -> Windows)
Tenancy (e.g. shared -> dedicated)
You can:
Take advantage of newer instance types (e.g. m5)
Adapt your RIs as business needs change
Drastically reduce the likelihood of unused RIs
Take advantage of price reductions (maintain commit $, get more instances)

Instance Size Flexibility reduces the need to match RI size to
running instance size for Standard and Convertible RIs
If:
• RI is Regional
• RI and Instance use is Linux/UNIX (incl.
Amazon Linux, CentOS, Ubuntu), and
• RI and Instance is Shared tenancy
RDS size flexibility applies to MySQL, MariaDB,
PostgreSQL, and Amazon Aurora database
engines, as well as the “bring your own license”
(BYOL) edition of the Oracle DB.
m4.4xlarge
(4 units)
m4.2xlarge
(2 units)
m4.2xlarge
(2 units)
m4.8xlarge
(8 units)
One RI
Can apply to
more than 1
smaller
instance
Or part of
a larger
instance
4 units
receive
discounted
RI rate

5. Designing for Cost Efficiency has countless methods
Containerisation (staff productivity
and compute utilisation)
Consolidated billing (RI and
volume discount benefits)
AWS CloudFormation
(Dev time saving)
Serverless &
AWS Lambda
ELB to Application Load
Balancer
Deliver content with
AWS CloudFront
(lower compute and data transfer)
Open source platforms & databases
(reduced licensing cost)
Low cost security monitoring via
AWS GuardDuty
Running resources in a
cheaper region
Static Web Hosting on S3
and using S3 Select

Understand Your EBS Workload Characteristics
Solid State Drives (SSD) Hard Disk Drives (HDD)
Volume Type Provisioned IOPS SSD (io1) General Purpose SSD (gp2) Throughput Optimized HDD (st1) Cold HDD (sc1)
Description
Highest-performance SSD
volume designed for mission-
critical applications
General purpose SSD
volume that balances price
and performance for a wide
variety of transactional
workloads
Low cost HDD volume designed for
frequently accessed, throughput-
intensive workloads
Lowest cost HDD
volume designed for
less frequently
accessed workloads
Use Cases
§ Critical business
applications that require
sustained IOPS
performance, or more than
10,000 IOPS or 160 MiB/s
of throughput per volume
§ Large database workloads,
such as:
§ MongoDB
§ Cassandra
§ Microsoft SQL Server
§ MySQL
§ PostgreSQL
§ Oracle
§ Recommended for most
workloads
§ System boot volumes
§ Virtual desktops
§ Low-latency interactive
apps
§ Development and test
environments
§ Streaming workloads requiring
consistent, fast throughput at a
low price.
§ Big data
§ Data warehouses
§ Log processing
§ Cannot be a boot volume
§ Throughput-oriented
storage for large
volumes of data that
is infrequently
accessed
§ Scenarios where the
lowest storage cost
is important
§ Cannot be a boot
volume
More Expensive Cheaper

Use Amazon S3 Storage Tiers
Take advantage of Infrequent Access (IA)
§ No code changes using lifecycle policies* – immediate savings
§ Suitable for cold data (backup, log files, etc.) with requirement for
fast retrieval.
Example
§ Our app stores 100 TB of photos
§ Each photo is about 10 MB
§ Using Standard S3, we pay $2,250 per month [US Standard Region]
* Alternatively, you can directly PUT into Standard – IA by specifying STANDARD_IA in the x-amz-storage-class header.

Example – Activate a Policy
Move data after 30 days
Assume we can move 80% of the data
Of which 20% is still accessed regularly < twice per month

S3 – IA – Result!
35%
Saving
Same 100 TB (20 TB Standard/80 TB IA)
costs only $1,460 per month (US Standard)

Eliminate Your Web Server Tier
How much time do you spend on maintenance?
How secure is your web tier?
What is your capacity planning for your web tier?

Example – Using S3 Static Website Hosting
Not so “static”:
§ JavaScript (Client Side)
– (includes AWS SDK)
§ CORS
Plus:
§ No servers
§ No patching
§ No scaling rules

S3 Static Website Hosting Reference Architecture
S3 bucket
CloudFront
distribution
Web Tier
Cognito
Identity
CloudFront
logs
www.example.com
static.example.com
Availability Zone A Availability Zone B
Auto Scaling Group
www.example.com
static.example.com
web
servers
web
servers

The Cost of Using Your DB as a BLOB Store
Databases (particularly RDBMSs) make poor BLOB stores!
Negative in terms of performance
Negative in terms of management
Negative in terms of cost

Example – Storing Your BLOB in the RDBMS
CREATE OR REPLACE TABLE
user_images
(userid int,
imageguid char(36),
image BLOB);
For example
Each Image = 2MB
2,049K per row
3 million rows = 5.862 TB
RDS MySQL cost = $3,279.56
(US Standard) per month (multi-
AZ, Standard Storage) - approx

Store BLOB in S3, Metadata in RDS
CREATE OR REPLACE TABLE
user_images
(userid int,
imageguid char(36),
imageURL VARCHAR(1000));
Per row we now store 2K in the RDBMS
3 Million rows = 5.722 GB
S3 Storage = 5.862TB = $194.94 (storage)
+ 3MM Puts, 3MM Gets = $212.93 (inclusive,
GETs, PUTs, Storage)
RDS MySQL cost = $1,663.30 (US Standard)
per Month
Total: $1,876.23
42%
saving

Amazon
ElastiCache
Predictable Performance
Decrease Database Cost
Cut Load on Backend
Increase Read Throughput
Reduce App Latency
Value of Caching

Amazon
ElastiCache
Redis Multi-AZ
No Data Transfer Costs
Fully Managed
Enhanced Redis Engine
Easy to Deploy & Use
Customer Value – ElastiCache vs. Self-Managed

Cache for Savings
Elastic Load
Balancing
EC2 App
Instances
Database
Instance
ElastiCache
Database Writes
App
Reads
Clients
Cache
Updates
Database Reads
Example 30,000 reads per second
db.m3.large – 30,000 PIOPS – Single-AZ: $3,889.68
cache.m3.large – 30,000 GETS per second: $355.02
90%
Saving!

DynamoDB
Pick the right tool for the job
Key/Value
Scalable
throughput
Low latency
Amazon Aurora
More complex
data/queries
Scalable
storage
Amazon
Redshift
Big (complex)
data
Higher
latency
ElastiCache
for Redis
Key/Value
In-Memory
(very) low
latency

Example - No one database to rule out all
MongoDB
Tracking
API
RTB
Engine
User&Stats
API
Tracking
API
RTB
Engine
DynamoDB
Decoupled
Amazon
Aurora
Amazon
Redshift
User&Stats
API

Queues – Not Just for Decoupling
SQS gives you tremendous power to decouple your
architecture
However, resilience is only one part of the story
Use queues to manage cost

SQS Trigger Auto Scaling Groups Based on Revenue
ApproximateAgeOfOldestMessage > 600
In our example, a single m4.large can process 1,000 images in an hour.
We don’t want paid customers to wait more than 10 minutes for their result.
ASG MIN 1, MAX 10, DESIRED 1
ApproximateNumberOfMessagesVisible >
1000
ASG MIN 0, MAX 1, DESIRED 0Free
Queue
Paid
Queue
Images
Source
mobile client
Auto
Scaling instances
Auto
Scaling instances
Images
Result

SQS Trigger Auto Scaling Groups Based on Revenue
In our example, a single m4.large can process 1,000 images in an hour.
We don’t want paid customers to wait more than 10 minutes for their result.
For example:
2,000 TXNs
50/50 free/premium
Free queue TXN cost:
$0.336/1,000 = $0.000336
*One instance
Paid queue TXN cost:
($0.336*6)/1,000 = $0.002016
*Six instances to meet 10 minute SLA
Free
Queue
Paid
Queue
Images
Source
mobile client
Auto
Scaling instances
Auto
Scaling instances
Images
Result

Simplify. Less Components. Less Cost.
Image
Source
mobile client
AWS
Lambda
For example:
Each TXN takes 3750ms
Assuming largest Lambda memory size
(1536 MB)
@ $ 0.000002501 per 100ms
Each TXN now costs $0.000937875
Premium queue TXN was $0.002016
S3 Event
Lambda
Result
53%
saving
Image
Result

Can Still Use SQS To Keep Free Tier Cheap
Free
Queue
Images
Sourcemobile client
Auto
Scaling
instances
More optimization
Make free tier even cheaper
using EC2 Spot Instances
Paid tier now gets instant
response (remove the 10
minute delay/SLA) at low cost
AWS
Lambda
Prefix-
based
Trigger
Image
Result

Public Subnet
Availability Zone A
Private Subnet
Public Subnet
Availability Zone B
Instance A
10.1.1.11 /24
Instance C
10.1.3.33 /24
Instance B
10.1.2.22 /24
Instance D
10.1.4.44 /24
Internet
Gateway
(IGW)
1 GB Data x 20
Intra-AZ by Private, Public or EIP = .01/GB
Elastic IP
205.x.x.27
Elastic IP
205.x.x.29
VPC 1
US-Standard Region
InFrom&OutToS3=0.00/GB
Amazon S3
Private Subnet
How To Save Data Transfer
§ You may use S3 to save on data transfer
between EC2 in different availability zones
(AZ).
§ The data transfer between two EC2 in
different AZ costs $0.01/GB, but S3 is free
to download from any AZ.
§ Consider the scenario where 1 GB data
is transferred 20 times from one EC2
server to another in different availability
zone. It will cost $0.20/GB (20 * 0.01).
§ However, if you are able to upload it to S3,
then you just pay for storage ($0.03 / GB /
month) and the best part is that data
transfer between S3 and EC2 is free.
§ Assuming data is deleted from S3 after a
day , the S3 cost will be $0.001. 99% cost
savings on that data transfer by using S3.
1
2
2
1
3
3
4
4
5
5

Use Gateway VPC Endpoints for S3 and
DynamoDB

HA vs. Cost Optimization
Product owners often push for cost optimization
§ Ignoring their availability requirements
§ Until something fails…..
§ How much is your loses if your mobile apps down per
hour/day?
§ What will happen to your customer obsession?
§ Will it affect your company image in the market?
FIRST availability, THEN cost!

HA Protection for EC2 – Auto Recovery (Free)
An EC2 instance (virtual machine) is not highly available by default.
At least
100%
Saving
EBS Volume
Elastic IP1
2
§ A hardware or software failure
affects the EC2.
§ CW regular health check
spots that the EC2 has failed.
§ CW starts the recovery of the
EC2 on another EC2 host
server .
§ A new EC2 is launched on a
different EC2 host server
automatically.
§ The new EC2 is assigned the
same ID and IP address as
the old EC2 and linked to the
same EBS.
CloudWatch (CW)
1
EC2 EC2
2
3
3
4
4
5
5
5
EC2 Host Server EC2 Host Server

Economical Mitigation For AZ-Level Disruption
Availability Zone A Availability Zone B
Availability Zone A Availability Zone B Availability Zone C
Example Always maintain 12 instances even if one AZ is disrupted
24
Instances
18
Instances
25%
saving

Spend less with good Cost
Management

Good cost management is about getting the right people to
care about spend and making saving easier
Allocate spend
through Tagging and a
multi-account strategy
Use the Cost Transparency
provided by AWS and
Key Performance Indicators
Use Cost Tools and
Automation

Pick the tool that provides the visibility you need
Simple, Static, Small
environment
Complex, Dynamic,
Large environment
1. Monthly AWS Invoice
2. AWS Billing
console
3. AWS Cost Explorer
and AWS Budgets
4. AWS Billing File Analysis,
DIY dashboards, and
3rd party tools

Spending less on AWS is a lot like driving
Learn how to use the pedals well, look at where you’re going (often), and
self-driving cars will save a lot of effort

AWS Enterprise Support, AWS Professional Services, and
AWS Partners can guide your Cost journey, contact your
AWS Account Manager for more information
AWS Enterprise Support
https://aws.amazon.com/premiumsupport/enterprise-support/
AWS Professional Services
https://aws.amazon.com/professional-services/
AWS Partner Network
https://aws.amazon.com/partners/

Suggested next steps
1. Get your teams to use Cost Explorer to
understand where you are spending
2. Pick 1 technical lever of optimisation covered today,
set up a KPI to measure it, and improve it over time.
(e.g. resource scheduling / on-off)
3. Come to a future AWS event about Cost to
find out more about tools, methods, and
discuss the topic with other customers

Thank YOU !!
Mani Chandrasekaran
Solutions Architect, AISPL
https://www.linkedin.com/in/cmanikandan
https:///twitter.com/cmani

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