Built-in Guidance: Optimizing Public Cloud Costs

Built-in Guidance: Public Cloud OptimizationTricia Pattee, VP of Product, HOSTINGMike McCracken, VP of Advanced Solutions, HOSTING

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Housekeeping

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• 85% of organizations have a multi-cloud strategy

• AWS remains in the lead, but competition is growing

• 52% are moving more workloads to the cloud

• Nearly half of organizations are implementing a cloud first strategy

Public Cloud Adoption

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Implementation Trends:

• Lack of expertise/resources is biggest issue

• Staffing resources is extremely difficult

• Security remains a big concern

• Lack of centralized cloud governance

• Pricing is complicated and difficult to forecast

Cloud Challenges

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Public Cloud Cost Optimization

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• Architectural Optimization

• Automation

• Resource Lifecycle Management

• Smart Procurement

4 Ways to Optimize Cloud Costs

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• Uncover overprovisioned devices

• Evaluate storage IOPS

• Choose the right instance types

• Choose the right product

• Evaluate licensing

Architectural Optimization

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Automation

• Infrastructure as Code

• DevOps Automation

• Demand-Based Infrastructure

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Infrastructure as Code

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DevOps Automation

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Demand-Based Infrastructure

• Automated Scaling

• Time of Day/Week/Month

• Usage Triggers

• On Demand Environments

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• Terminate unused instances

• Identify orphaned storage volumes

• Assign owners to resources & projects

• Just-in-time resource provisioning/de-provisioning

Resource Lifecycle Management

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Smart Procurement

• The right cloud for the workload

• The right location

• The right resources

• Resource-type standardization

• Purchase commitments

• Billing Alerts

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The Right Cloud

$1,000

$1,500

$2,000

$2,500

$3,000

AWS OnDemand

AWS 1-YearCommit

Azure OnDemand

Azure Ent.Agreement

Private Cloud

Estimated Single Virtual MachineMonthly Fee by Cloud

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The Right Location

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

United States Europe Asia

Estimated Single Virtual MachineMonthly Fee by Location

AWSOn Demand

AzureOn Demand

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AWS Instance

types (2 vCPU) RAM (GB) Annual Cost

t2.medium 4 $456

t2.large 8 $911

c3.large 3.75 $920

c4.large 3.75 $964

m4.large 8 $1,104

m3.large 7.5 $1,165

r3.large 15.25 $1,533

The Right Resource

3x Cost

Differential

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Resource Standardization

Instances

• 10 @ c3.2xlarge

• 5 @ c3.4xlarge

• 7 @ c4.2xlarge

• 3 @ m1.large

• 25 @ m3.2xlarge

• 17 @ m3.large

• 5 @ m3.medium

• 2 @ m4.2xlarge

• 1 @ m4.xlarge

• 50 @ t2.medium

• 10 @ t2.micro

• 9 @ t2.small

One-Off Instances

• 5 @ c3.4xlarge

• 3 @ m1.large

• 5 @ m3.medium

• 2 @ m4.2xlarge

Business Unit Standard Instances

• 10 @ c3.2xlarge

• 7 @ c4.2xlarge

• 25 @ m3.2xlarge

• 17 @ m3.large

• 10 @ t2.micro

Corporate Standard Instances

• 7 @ c4.2xlarge

• 1 @ m4.xlarge

• 50 @ t2.medium

• 9 @ t2.small

On-DemandInstance Purchase

(No Discount)

1-YearR.I. Purchase

(Base Discount)

3-YearR.I. Purchase

(Maximum Discount)

Amazon Marketplace R.I. Purchase/Sale

Reserved Instance purchase/sale to cover over and under Reserved

Instance purchases

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Purchase Commitments

Workloads

• Relatively standard instance types

• Relatively consistent usage

10 20 30 40 50 60 70 80 90 100

Number of C4.Large Instances

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Amazon EC2 Reserved Instances (RI) provide a significant discount (up to 75%) on EC2 Instance costs compared to On-Demand pricing.

AWS Reserved Instance Defined

AWS Billing automatically applies your RI’s discounted rate when attributes of EC2 instance usage match attributes of an active RI.

Instance Type &Tenancy

Region orAvailability Zone

Platform

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Reserved Instance -v- Instances

Amazon EC2 Reserved Instances (RI) are a COUPON that is applied to a customer’s monthly bill. RI’s are not an actual Instance purchase

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Applying Reserved Instance Credits

Amazon EC2 Reserved Instances (RI) must be applied to Instance purchases of the same instance type, tenancy, region/availability zone and platform

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Reserved Instance Purchasesin Action

Reserved Instance Pricing

EC2 Instance Type AWS Region Operating System

MonthlyOn Demand

List Price

MonthlyDiscountAmount

MonthlyDiscount

Percentage

MonthlyReserved InstanceDiscounted Price

US East (N. Virginia)

c3.2xlarge US East (N. Virginia) Linux/UNIX $306.60 $80.56 26% $226.04

m1.large US East (N. Virginia) Linux/UNIX $127.75 $40.77 32% $86.98

m3.2xlarge US East (N. Virginia) Linux/UNIX $388.36 $92.53 24% $295.83

m3.large US East (N. Virginia) Linux/UNIX $97.09 $22.82 24% $74.27

m3.medium US East (N. Virginia) Linux/UNIX $48.91 $12.14 25% $36.77

m4.2xlarge US East (N. Virginia) Linux/UNIX $314.63 $88.38 28% $226.25

m4.xlarge US East (N. Virginia) Linux/UNIX $156.95 $44.24 28% $112.71

t2.medium US East (N. Virginia) Linux/UNIX $34.31 $5.66 17% $28.65

t2.micro US East (N. Virginia) Linux/UNIX $8.76 $1.57 18% $7.19

t2.small US East (N. Virginia) Linux/UNIX $16.79 $2.52 15% $14.27

US West (Oregon)

t2.small US West (Oregon) Linux/UNIX $16.79 $2.52 15% $14.27

EU (Frankfurt)

c4.2xlarge EU (Frankfurt) Linux/UNIX $331.42 $64.02 19% $267.40

t2.micro EU (Frankfurt) Linux/UNIX $10.22 $2.20 22% $8.02

NOTESAll discounting Assumes 1-year term with no upfront purchase

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HOSTING SERVICES

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Hybrid Infrastructure

on-premise

HOSTING PUBLIC CLOUD SERVICES

For more information on how HOSTING can help guide your business to the cloud, go to www.HOSTING.com

Built-in Guidance: Optimizing Public Cloud Costs

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