AWS Economics:

Learn how to efficiently optimize your resource utilization and control your costs
NYC Cloud Computing Group
Aaron C. Newman CEO/Founder, CloudCheckr Aaron.Newman@CloudCheckr.com

Agenda:
Overview of Costs in AWS Going Reserved Going Spot Optimizing Resources Economic Denial of Sustainability Conclusion, Resource, and Questions

Overview of AWS Costs

State of Cloud Computing Cost

10 years ago
The datacenter was a (mostly) fixed cost High cost for even the most basic data center You paid for your peak capacity

Co-location/ISPs as an alternative
Still buying your own equipment/building for peak capacity High margins were the norm

About 2010 Public Cloud Turns the Corner

Technology matures Becomes the de facto for getting a startup off the ground Amazon starts compressing the high margin IT business

Over 20 price reductions in Amazon AWS by 2013

Prices continue to drop. But what is the reality of those 20 price reductions?
EC2 Linux Small Instance (On-Demand Per Hour): Aug 2006 = $0.10, Nov 2009 = $0.085, May 2013 = $0.06 Extrapolate that to 2015 = somewhere between $0.035 and $0.05

Cost is a product of usage

In old data center, cost was fixed
Once you bought the equipment, little could be done to reduce your cost. No advantage to ever scale down.

The public cloud is heavily weighted to variable costs

If you can use less, you spend less

Optimizing Resource Utilization in the Cloud matter

Computational engines run as close to 100% as possible Interactive components need a cushion for peak usage

Auto scaling - important tool for optimizing cloud usage

Scale down as much as scaling up

Cloud Costs
(Bytes of Data Transferred) * Price + (Size of Compute Resource) * (Price of Compute Resource) * (Number of Hours) + (Storage Used) * Price * (Time Stored) + (Transactions Processed) * Price

Architecting Applications
In the past, architecture was typically a large, multithreaded executable talking to a single database running on the biggest boxes you could afford. Sat idle a lot. Moving old apps into the cloud
Can you resize your resources different times of the day? Use load balancers or Multi AZ capabilities to resize

Important to design your apps to scale horizontally Design you application into components
That can be added or removed dynamically

Going Reserved

What is Reserved?
Pay up front, get a lower variable cost ROI as high as 500% over 3 years, 60% savings in cost Types of Reserved Resources Available
EC2 Instance RDS DB Instance Elasticache Node S3 Reserved Storage (for GovCloud) Utilization light, medium, heavy Commitments 1 or 3 year

Types

Calculating ROI on Reserved Instances

Picking Type of Reserved Instances

Warnings using Reserved Instances

Need to be able to predict what youll use
If you design application to scale horizontally this becomes easier

Heavy Reserved Instances even if you dont use it youre charge Match reserved instances carefully!
OS Type, Availability Zone, Size (VPC vs. Classic, Tenancy only matter for guaranteed availability) AWS tools do not show you if an instance is properly mapped

Determine your highest ROI Instances, Database, Nodes?

Consolidated Billing
Reserved Pricing is applied across AWS accounts AWS Tools do not show you how your reserved instances are applied

Going Spot

What is Spot Pricing

Bidding for unused instances
Supply and demand dictates current price Place your max bid, your instance shuts down if max bid exceeded by others

Spot is almost always cheaper But you need to consider < 99% availability
Spot prices spike frequently

Slightly slower to spin up

Wait for spot request to be fulfilled before instance can start

More complex to manage

Using EBS/Instance store

What Does Spot Pricing Look Like

This morning spot pricing:
US East, Linux, M1 Small (1 ECU): 0.007 - 0.010 SA, Linux, M1 Small (1 ECU): 0.011 On demand: US East = 0.06, SA = 0.08 US East, Linux, M1 Extra Large (8 ECU): 0.055 - 0.64 SA, Linux, M1 Extra Large (8 ECU): 0.084 On-demand: US East = 0.48, SA = 0.64 US East, Linux, M3 Double Extra Large (26 ECU) 0.115 SA, Linux, M3 Double Extra Large (26 ECU) 0.185 On-demand: US East = 1.00, SA = 1.36

Spot Pricing is typically 10-20% of On-Demand But can easily spike HIGHER than On-Demand

Spot Strategies
Most people dont understand spot pricing, afraid to use it
As more people understand and use it, pricing will be driven up

Very tempting but dangerous to run exclusively on Spot

From GigaOm: A sudden spike in the price of m2.2xlarge servers (normally $.44/hour) drove the price briefly up to $999/hour, causing a site-wise outage. If you follow this strategy, use a variety of instance sizes, Availability Zones, and even regions to minimize the risk

Hybrid Reserved/Spot strategies

Run as many spot instances as possible But maintain a base level of Reserved Instances Switch to On-Demand if Bid Price Exceeds On-Demand Price This is a manually intensive strategy

Optimizing Resources

Overview
Keep track of what you are using
Find and eliminate idle instances Find and reduce under-utilized resources Unused EBS drives, ELB, multiple snapshots of same EBS drive

Horizontally scale
Find smallest instance type that can handle your transactions Find your bottle necks (network, disk I/O, CPU util, memory util)

Turning off resources when they arent used

Turn off over the weekend, overnight

Use only what you need

E.g. dont check multiple copies of buckets in S3

Optimizing Instance Types

Picking the optimal Instance Type: Comparing ECU (EC2 Compute Units)
M1 Small (1 ECU) On-Demand in US East = $0.06 ($0.06 per ECU) M3 Double Extra Large (26 ECU) On-Demand in US East = $1.00 ($0.0385 per ECU)

Comparing the cost of Memory

M1 Small (1.7 GiB memory) On-Demand in US East = $0.06 ($0.035 per GiB) M3 Double Extra Large (30 GiB memory) On-Demand in US East = $1.00 ($0.033 per GiB)

But you need to compare Resource Type, Pricing Type (ondemand/spot/reserved), Region, AZ, etc for your circumstance

S3, Glacier, and RRS

S3 Pricing about 10 cents per gigabyte (starts at 9.5c in US East) Reduced Redundancy Storage
AWS doesnt store as many copies of your S3 objects Typically about 20% cheaper (US East $0.095 reduced to $0.076) Ideal if you are storing terabytes or petabytes of songs, movies, documents that can be recovered

How much of your S3 storage can you convert to RRS? Glacier Pricing about 1 cent per gigabyte
Pricing difference from S3 decreases as the price goes up Takes up to 4 hours to retrieve files, and cost to retrieve

S3, Glacier, and RRS

S3 Pricing about 10 cents per gigabyte (starts at 9.5c in US East) Reduced Redundancy Storage
AWS doesnt store as many copies of your S3 objects Typically about 20% cheaper (US East $0.095 reduced to $0.076) Ideal if you are storing terabytes or petabytes of songs, movies, documents that can be recovered

How much of your S3 storage can you convert to RRS? Glacier Pricing about 1 cent per gigabyte
Pricing difference from S3 decreases as the price goes up Takes up to 4 hours to retrieve files, and cost to retrieve

Economic Denial of Sustainability Attacks

EDoS Attacks
Variation of Distributed Denial of Service Attack
Goal is not to overload and crash an application Instead to cause the server hosting costs to overwhelm the victims budget

the infrastructure allows scaling of service beyond the economic means of the vendor to pay their cloud-based service bills
-http://rationalsecurity.typepad.com

Worst Case Scenario AWS CloudFront

http://www.reviewmylife.co.uk/blog/2011/05/19/a mazon-cloudfront-and-s3-maximum-cost/

Author calculated maximum possible charge

Used default limit of 1000 requests per second and 1000 megabits per second At the end of 30 days a maximum of 324TB of data could have been downloaded (theoretically) $42,000 per month for a single edge location CloudFront has 30 edge locations

Stories and Lessons Learned

Anecdotal user experience
Personal website hacked by file sharers Received bill for $10,000

Note: AWS only charges for data out

All data transfer in is at $0.000 per GB Mitigates costs if you dont respond to requests, doesnt cost you anything

Use pre-paid credit cards or credit card with appropriate credit limit
Not sure if this limits your liability legally

Solutions?
Amazon limits/caps have been in the works since 2006
Each year Amazon talks about intention of releasing the feature

May 2012 Amazon announces Billing Alerts

http://aws.amazon.com/about-aws/whatsnew/2012/05/10/announcing-aws-billing-alerts/ Helps alert you when this starts happening to you Could still be a costly few hours

Misconfigured Security Settings

Scanning Amazon S3 to identify publicly accessible buckets
http://cloudcheckr.com/2012/05/aws-s3-bucketsbucket-finder/

Open source tool Bucket Finder

script launches a dictionary attack on the names of S3 buckets and interrogates the bucket for a list of public and private files Searching out EDoS

Resources, Conclusion, and Questions

5 Strategies To Optimize
Keep a close handle on what you are running in the cloud Measure what you are spending Calculate Return On Investment Minimize what you dont need Protect yourself from EDoS

Its Not About the Price

Cloud Computing is not about the cost
Its about accelerating business, moving faster

IaaS is following in SaaS footstep

SalesForce.com pioneered the movement Hard to imagined a third-party controlling your entire customer list (one of your most valuable assets) They proved it was secure, prudent, and effective

Still see some of the slower moving Corporate types claiming production work loads cant be run on the cloud
While their competitors leveraging the cloud eat their lunch

Resources
Further reading: How AWS Pricing Works
http://media.amazonwebservices.com/AWS_Pricing_Overview.pdf

AWS Service Pricing Overview

http://aws.amazon.com/pricing/

CloudCheckr Whitepaper Cost Series

http://www.cloudcheckr.com/whitepapers

AWS Simple Monthly Calculator

http://calculator.s3.amazonaws.com/calc5.html

Questions?

Questions on:
Cloud Computing Resource Utilization Optimizing Your Costs CloudCheckr

Thank You for Attending

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Aaron Newman is the Founder of CloudCheckr (www.cloudcheckr.com) Please contact me with additional questions at: aaron.newman@cloudcheckr.com