AWS Webinar Series - Cost Optimisation Levers, Tools, and Strategies

© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon Confidential and Trademark© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon Confidential and Trademark
Jon Janes – Account Manager
AWS Cost Optimisation
Levers, Tools, and Strategies
Maximising business value through cost savings
September 2018

© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon Confidential and Trademark
© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Today’s Speakers
Jon Janes
Account Manager
Sydney, Australia
jonjanes@amazon.co
m
Paul Wakeford
Cloud Design,
Security and Cos
Architect

Contents
Technical Optimisation
levers and tools
How AWS Helps You
Realise Value and
Save Cost
Voice of the
Customer
Establishing
Cost Visibility
Strategic Optimisation
Mechanisms
Survey and Q&A

How AWS Helps You
Realise Value and Save Cost

Cloud is the new normal with fewer organisations
asking “why” and more asking “how and how fast?”
Industrial
Revolution
Cloud
Revolution
Shift to on-demand
computing
Shift to on-demand
power

Data TransferReal Estate
Facilities
Power
On AWS, you simply pay for fewer things and unlock
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

AWS lowers prices over time
66 Price
Reductions!

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 SLAs &
reducing unplanned
outage.
Deploy new features /
applications faster and
reduce errors.
Typical
Focus
Further
Compelling Cloud
Benefits
Cost Savings
(TCO)
Staff
Productivity
Business
Agility
Operational
Resilience
The Economic Benefits of Cloud extends well beyond
cost savings

Establishing
Cost Visibility

Speed, scale, complexity, and value at stake drives the
need for visibility and control

Pick the Cost 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. 3rd party tools
AWS Billing File Analysis,
and DIY dashboards

Optimisation
levers and tools

The Technical Pillars of Optimisation
Right Size &
Decommission
unused Resources
Use Reserved
Instances
Increase
Elasticity
Match Storage
to Need
Design for
Cost

Pillar 1: Right Sizing your Resources
Right Sizing is about
• Selecting the cheapest instance (size and
family) while meeting performance needs
• Most commonly based on CPU, RAM,
storage, and network needs
• Doing this before/during migration via
discovery tools reduces overall effort

87%
Saving
Right Sizing example
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

Decommission unused resources such as
• Unattached Elastic IPs
• Unattached EBS
• Idle / unattached load balancers
• Incomplete S3 transfers
• Idle EC2, RDS, Redshift instances
• Clearing old snapshots

• AWS CloudWatch (manual)
• AWS Trusted Advisor
• AWS Answers - Cost Optimisation: EC2 Right Sizing
https://aws.amazon.com/answers/account-management/cost-
optimization-ec2-right-sizing/
• 3rd party paid tools available from the AWS Marketplace, incl. but no
limited to:
Tools for Right Sizing and finding unused resources

Pillar 2: Increase Elasticity
AWS allows you to fit today’s cost to today’s demand.
“Hug your workloads, not your servers!”

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
AWS Auto Scaling helps you match resources to demand
Autoscaling 51 m5.large instances across 24 hours instead of running a single
m5.2xlarge saves 47%

Reduce non-prod spend by 70% or more via scheduling
Fun fact:
RDS can be
turned off too
Maximise savings via automatically turning off resources at night with
manual turn-on in the morning

• 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

RI
coverage
Total use
Key
Reserved Instances for one financial services customer resulted in
39% decrease in unit cost
Reserved Instance
purchase
Pillar 3: Use Reserved Instances

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

EC2 RI matching properties
• Instance type: m4.xlarge
o or Instance Family: m4.
• Operating System: Linux/Unix, Windows, Windows with
SQL Server Standard, etc.
• Region: ap-southeast-2 (Sydney)
o or AZ: ap-southeast-2a
• Tenancy: Shared, dedicated, host

RIs are most often used for always-on instances
(can still be used to save for non-always on)
Commitment level
1 year (approx. payback 7-10 months)
3 year (approx. payback 10-20 months)
AWS services offering RIs
Amazon EC2 & EC2 Hosts
Amazon RDS
Amazon Redshift
Amazon ElastiCache
Amazon Elasticsearch (new)
Amazon DynamoDB*
Amazon CloudFront*
*Discount for commitment, but not an RI

EC2 RI types cater to a range of customer needs
1 year 3 years
Standard Regional (e.g. ap-southeast-2)
(with Linux/Unix Size Flex)
Regional
Zonal (e.g. ap-southeast-2a)
(with capacity reservation)
Zonal
Convertible Regional Regional
Zonal Zonal
Note: You can easily switch between Regional and Zonal at no cost
Items shaded in Orange boxes affect pricing

Which EC2 RIs give greater discount?
Greater discountLess discount
All upfrontPartial upfrontNo-upfrontPayment option
3 year1 yearDuration
Linux/UnixOthers (typically)Operating System
Newer genOlder generations (typically)Instance type
StandardConvertibleClass

Convertible RIs offer great flexibility
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)

The commitment for Convertible RIs includes:
1yr or 3 yrs. (not refreshed on conversion)
An AWS Region
EC2 on AWS
Spend (convert to equal or greater $)

Examples of conversion
m4.xlarge
$20 upfront
remaining
m4.large
$10 upfront
m4.large
$10 upfront
No True-up
required
m4.xlarge
$20 upfront
remaining
m4.2xlarge
$40 upfront
True-up $20
1. Sizing to smaller instance (same family and OS)
2. Sizing to larger instance (same family and OS)

Examples of conversion
m4.xlarge (Linux)
$20 upfront
remaining
r4.xlarge (Windows)
$25 upfront
True-up $5
3. Sizing to more expensive instance type
r4.xlarge
$25 upfront
remaining
t2.large
$9 upfront True-up $2
4. Sizing to cheaper instance type
t2.large
$9 upfront
t2.large
$9 upfront

Instance Size Flexibility reduces the need to match
RI size to running instance size
If your RI is:
• Regional
• Linux/UNIX (incl. Amazon Linux, CentOS, Ubuntu), and
• Shared tenancy
Then the RI will apply to all sizes of instances in the same family (e.g. m4 RIs apply to all
other m4’s) in a given region. m4 RIs cannot apply to m3’s, as they are a different family.
E.g. 1 m4.xlarge RI (Syd region, shared, Linux/Unix) applies to:
2 m4.large instances (Syd region, shared, Linux/Unix) or
½ a m4.2xlarge instance (Syd region, shared, Linux/Unix)
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

See RI Coverage via Cost Explorer
RI Coverage shows the % of total use that is enjoying a discounted rate

See RI Recommendations and Estimated Savings via
Cost Explorer accessed here:
1
2

This report can also be used to understand what your unused Convertible RIs
could be changed into
See RI Recommendations and Estimated Savings via
Cost Explorer

See RI savings and utilisation % via Cost Explorer

Receive email or SNS notification of low RI Utilisation,
RI Coverage, Spend, and Usage via AWS Budgets

Pillar 4: Reduce Elastic Block Store (EBS) spend by
picking the class that fits your need
https://aws.amazon.com/ebs/details/
Provisioned IOPS
SDD (io1)
General Purpose
SDD (gp2)
Throughput
Optimized HDD (st1)
Cold HDD
(sc1)
Default
Approx. 75%
cheaper than gp2
Approx. 50%
cheaper than gp2
Size matters for EBS
because you pick the
amount of storage
provisioned, whereas
S3 and EFS scale
dynamically

Storage Classes on Simple Storage Service (S3)
Active data Archive dataInfrequently accessed data
Standard (default)
Hot
Standard - Infrequent Access
Warm
Amazon Glacier
Cold

Pillar 5: Designing for Cost
Containerisation (staff productivity
and compute utilisation)
Amazon EC2 Spot
AWS CloudFormation
(developer time saving)
Serverless &
AWS Lambda
ELB to Application Load
Balancer
Deliver content with
AWS CloudFront and Caching
(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

Architectural
Optimisation
Quick-win Optimisation
Summary of the Technical Levers of Optimisation
Right Size &
Decommission
unused Resources
Use Reserved
Instances
Increase
Elasticity
Match Storage
to Need
Design for
Cost

Optimisation Mechanisms
and Strategies

Optimisation Mechanisms and Strategies will help
make other optimisation activity easier to achieve
Optimisation
Mechanisms/
Strategies
Establish Cost
Visibility
Architectural OptimisationQuick-win Optimisation

Training and on-boarding that considers cost
drives cost aware behaviour
Resources to get started:
1. AWS Cost Management
https://aws.amazon.com/aws-cost-management/
2. AWS Well Architected - Cost Optimisation whitepaper
https://d1.awsstatic.com/whitepapers/architecture/AWS-Cost-Optimization-
Pillar.pdf
3. 100 Level –AWS re:Invent 2015 | (ISM402) Cost Optimization at Scale
https://www.youtube.com/watch?v=i1Uq8_gt2p4
4. 200 Level – AWS re:Invent 2016: Cost Optimizing Your Architecture: Practical
Design Steps For Savings (ARC310)
https://www.youtube.com/watch?v=qYHR_V1lvNU

Tagging resources enhances the value of your cost tools
???
App
BU
Owner
https://docs.aws.amazon.com/awsconsolehelpdocs/latest/gsg/tag-editor.html

AWS Enterprise Support, AWS Professional Services, and AWS
Partners can guide your Cost Management and Optimisation journey
and initiatives, contact your AWS Account Manager for more info.
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/

Summary of how to maximise business value through
cost savings
Apply optimisation
levers and tools
AWS helps you
realise value and save
cost
Utilise avenues for
support if needed
Establish cost visibility
on AWS, starting with
AWS Cost Explorer
Apply optimisation
Mechanisms/Strategies

Voice of the Customer
Paul Wakeford
Cloud Design, Security and Cost Architect

© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon Confidential and Trademark© 2018, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Amazon Confidential and Trademark
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AWS Webinar Series - Cost Optimisation Levers, Tools, and Strategies

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