the science behind choosing aws reserved instances
TRANSCRIPT
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Today’s TopicsIntroduction
1. Purchasing Pitfalls
2. Understanding Reservations
3. How to calculate RIs
4. Recommended RI purchase approach
Toban Zolman VP of Product Development
TODAY’S SPEAKER
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Infrastructure analytics for scaled web businesses and enterprises.
Cloud Infrastructure AnalyticsAbout Us
650M+ in tracked cloud costs. 8,000+ Users
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Our SolutionHow It Works
1 2 3
4 5
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Cost Analytics Dig into your operating costs with detailed costs by tag, service, and usage type. !
EC2 Usage Analytics Spot under-utilized resources w/ instance level usage metrics. !!
RI Purchase Analytics Understand the exact combination of Reserved Instances that will maximize your savings. !
Enterprise Enablement Organizational group views/filtering/rollups, multi-user access. !
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COMPUTE
Amazon EC2
DATABASE
DynamoDB
RDS
Redshift
Elasticache
CDN
CloudFront
What is a reservation?Understanding Reservations
Reservations allow you to reserve resources/capacity for one or three years in a particular availability zone in exchange for a lower overall unit price.
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Why make reservations?Understanding Reservations
1. Lower the cost of resources you are already usingReservations provide substantial cost savings versus “on-demand” pricing.
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RI Cost Savings vs. On-DemandUnderstanding Reservations
There are 2,000+ different reservation types each with their own “break-even” points.
LINUX m1.xlarge instance - over 3 years
Annual Utilization Rate Light RI Savings Rate Medium RI Savings Rate Heavy RI Savings Rate
20% 25% -7% -77%
40% 40% 33% 11%
60% 45% 46% 41%
80% 48% 52% 56%
100% 49% 59% 65%
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Why make reservations?Understanding Reservations
1. Lower the cost of resources you are already usingReservations provide substantial cost savings versus “on-demand” pricing.
2. Lock-in future capacity in the same Availability Zone Very useful if you experience bursts/spikes in usage
3. Reserve capacity in another region just in case...Outages could cause a run on capacity. Reservations ensure you get seat at the table.
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Reserved Instance Pricing Components
Reservation Type Upfront Fee Hourly Usage Fee Minimum Usage Level
Light Yes YesNone If the instance is not used during the hour, there is no charge.
Medium Yes YesNone If the instance is not used during the hour, there is no charge.
Heavy Yes YesYes Billed a full month’s worth of hours at the start of each month.
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How are reservations applied?
• Reserved Instances are purchased for an instance type (m1.xlarge) with a specified OS (LINUX) in a particular Availability Zone (us-east-1a)
• Reservations are applied each hour.
• If an instance is running in a “linked account”, it can inherit an unused reservation from a different linked account under the consolidated billing payer account
• Capacity reservation stays with the linked account.
Understanding Reservations
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Modifying Reserved Instances
• Amazon allows companies to apply to transfer a reservation from one Availability Zone to another
• Trade-in existing Reserved Instances for a different size in the same family
Understanding Reservations
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Changing Instance Type
Instance Size Normalization Factor
small 1
medium 2
large 4
xlarge 8
2xlarge 16
4xlarge 32
8xlarge 64
Understanding Reservations
1 xlarge g 2 large 1 large g 4 small
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Instance types without a family
• t1.micro !
• cc1.4xlarge !
• cc2.8xlarge !
• cg1.8xlarge !
• cr1.8xlarge !
• hi1.4xlarge !
• hs1.8xlarge
Understanding Reservations
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The Fine Print
• Transfers do not happen automatically
• Transfers are not guaranteed and are based on available capacity
Understanding Reservations
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m1.large linux us-east-1a A tale of three instances
30% 30% 30%
30% is greater than the break even point for a light reservation
1 2 3
3 Light
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When were the instances running?A tale of three instances
Remember: Reservations are applied every hour
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Instances running at the same time
If the instances are running at the same time you need multiple RIs
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 26 27 28 29
30
A tale of three instances
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3 Light reservations cost savingsA tale of three instances
On-demand hourly cost $0.240
RI hourly cost $0.136
RI upfront fee $243
Effective hourly rate @ 30% utilization $0.228
Hourly Savings $0.011
Total Savings for this example $90.93
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Instances running at different times
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 26 27 28 29
30
A tale of three instances
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Instances running at different timesA tale of three instances
Collectively the 3 instances cover 90% of the hours of the month
21
3
Heavy
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1 Heavy reservation cost savingsA tale of three instances
On-demand hourly cost $0.240
RI upfront fee $676
RI hourly cost $0.056
Effective hourly rate @ 90% utilization $0.141
Hourly Savings $0.098
Total Savings for this example $774.65
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1 Heavy vs. 3 LightsA tale of three instances
1 Heavy 3 Lights
Total Savings $774.65 $90.93
Total upfront fees $676 $729
Buying 3 lights would have wasted $486 in upfront fees
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You have to understand how many instances are running each hour to know how many RIs to purchase
Applying what we’ve learned:
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Running Instances by Hour of the Month
Hour of month Running Instances
1 4
2 6
3 0
4 5
5 7
6 8
7 5
8 3
9 12
10 3
(example assumes 10 hours in the month)
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Hourly Frequency Distribution of Instance Levels
Running Instance Count Frequency of Occurrence Frequency %
0 1 10%
1 9 90%
2 9 90%
3 9 90%
4 7 70%
5 6 60%
6 5 50%
7 4 40%
8 2 20%
9 1 10%
10 1 10%
11 1 10%
12 1 10%
Break even point for Heavy
Break even point for Medium
Break even point for Light
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Implications for savings
• Base purchase decisions on hourly instance counts of each instance type per Availability Zone (not aggregate data)
• Frequent reservation purchases help maximize cost efficiency
• Don’t over purchase heavy reservations. Utilize Light and Medium reservations to handle volatility
• If capacity reservations are important, utilize light reservations to hold capacity in specific Availability Zones
Purchasing Recommendations
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Thank You
For more info
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