NYC Cloud Computing Group

AWS Economics: Learn how to efficiently optimize your

resource utilization and control your costs

Aaron C. NewmanCEO/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 2013Prices 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, multi-threaded 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)

• Types• Utilization – light, medium, heavy• Commitments – 1 or 3 year

Calculating ROI on Reserved Instances

Picking Type of Reserved Instances

Warnings using Reserved Instances

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

• Heavy Reserved Instances – even if you don’t use it you’re 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-DemandBut can easily spike HIGHER than On-Demand

Spot Strategies

• Most people don’t 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 aren’t used• Turn off over the weekend, overnight

• Use only what you need• E.g. don’t 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 (on-demand/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 doesn’t 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 doesn’t 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 victim’s 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/amazon-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 don’t respond to requests, doesn’t 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/whats-new/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-buckets-buck

et-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 don’t need

• Protect yourself from EDoS

It’s Not About the Price

• Cloud Computing is not about the cost– It’s 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 can’t 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

Get your FREEMIUM account to check your public cloud at www.cloudcheckr.com

Aaron Newman is the Founder of CloudCheckr (www.cloudcheckr.com)

Please contact me with additional questions at:aaron.newman@cloudcheckr.com