Practical Cloud Economics

Deck from a 15 minute introductory talk with practical tips on Cloud Economics - focussed on IaaS.

Transcript

1. Ed Byrne, October 2012 Practical Cloud Economics
2. About Me Cloud and Enterprise IT Entrepreneur CEO, CloudVertical - “Reducing IT Waste” Previously GM, Hosting365 (now SunGard) @edbyrne www.edbyrne.me blog.cloudvertical.com
3. Agenda What is Cloud Economics The Myths of Cloud Computing Cost Variables and Cost Models Resources
4. Principles of Cloud Economics IT as a Utility - Available and Scalable IT in a Consumption based Payment model Theoretically 100% capital efficient
5. Capacity is CapEx and Cyclically Driven Usage follows predictable patterns Cost goes up and to the right, with a **** moment IT Cost Model
6. Capacity scales up and down in line with demand Usage follows predictable patterns (no change) Cost matches capacity - pay as you consume Cloud Cost Model (Theory)
7. Problem - No one operates the ‘Cloud Cost Model’ The Cloud is not analogous to the Electricity model. The Cloud is not Pay as You Go. It’s Pay as You Provision. Capacity Usage is the problem. The traditional capacity planning model has migrated to the Cloud. • Physical Hardware - 20% Utilisation Average • Virtualised Infrastructure - 30% Utilisation Average • Cloud Deployments - 30% Utilisation Average
8. Myth # 1 The Cloud is Cheap
9. Myth # 2 The Cloud is Cheaper than On- Premise
10. Myth # 3 You Pay for What You Use
11. Myth # 4 “I can migrate easily”
12. Myth # 5 “I’ll save by following the moon or the sun”
13. How to Cost the Cloud Services - Compute, Memory, Storage, Network Units - GB/hour; GB/used; CPU+RAM/hour; GB/managed Price Variables - Location; SLA; Tiers; Contract vs. PAYG Service Capacity Required as UNITS x Price (scenarios). Comparison to Fully Loaded On-Premise Cost?
14. Time Key Day = 24 Hours Week = 168 Hours Month = 730 Hours Year = 8,760 Hours Month = 2,628,000 Seconds AWS Costs Cheat Sheet On-Demand Instance Costs Instance Hour Day Week Month Year Micro Small Medium Large Extra Large Extra Large High Memory Double Extra Large High Memory Quadruple Extra Large High Memory Medium High CPU Extra Large High CPU Quadruple Extra Large Cluster Compute Eight Extra Large Cluster Compute Quadruple Extra Large Cluster GPU Quadruple Extra Large High I/O SSD 0.02 0.48 3.36 15 175 0.08 1.92 13.44 58 701 0.16 3.84 26.88 117 1402 0.32 7.68 53.76 234 2803 0.64 15.36 107.52 467 5606 0.45 10.8 75.6 329 3942 0.9 21.6 151.2 657 7884 1.8 43.2 302.4 1314 15768 0.165 3.96 27.72 120 1445 0.66 15.84 110.88 482 5782 1.3 31.2 218.4 949 11388 2.4 57.6 403.2 1752 21024 2.1 50.4 352.8 1533 18396 3.1 74.4 520.8 2263 27156 Regional Cost Differences Region Variation US East (Virginia) BASE US West (Oregon) 0% US West (California) 12.5% EU (Ireland) 8% Asia (Singapore) 8% Asia (Toyko) 15% South America (Sao Paulo) 45% All Prices in Dollars, from US East Virginia as published 11 October 2012. Tiered Discounts and Free Tier Amounts Not Applied. For more info go to www.cloudvertical.com Storage Instance Storage N/A EBS Standard 10c /gb-month (provisioned) EBS PIOPS 12.5c /gb-month (provisioned) EBS Requests 10c per million EBS Provisioned IOPS 10c /month (2.628m requests) EBS Snapshot 12.5c /gb-month (stored) S3 Standard 12.5c /gb-month (stored) S3 Reduced Redundancy 9.3c /gb-month (stored) Glacier 1c /gb-month (stored) Network Data IN FREE Data OUT 12c /gb Data within AZ FREE Data within Region 1c /gb Managed Data (EIP/ELB) 1c /gb Load Balancer 2.5c /hour Load Balanced Traffic .8c /gb IP Address Per Instance FREE Extra or Unused IP Address .5c /hour Instance Sizes API name Compute Memory Hourly Cost t1.mirco < 2 0.613 0.02 m1.small 1 1.7 0.08 m1.medium 2 3.75 0.16 m1.large 4 7.5 0.32 m1.xlarge 8 15 0.64 m2.xlarge 6.5 17.1 0.45 m2.2xlarge 13 34.2 0.9 m2.4xlarge 26 68.4 1.8 c1.medium 5 1.7 0.165 c1.xlarge 20 7 0.66 cc1.4xlarge 33.5 23 1.3 cc2.8xlarge 88 60.5 2.4 cg1.4xlarge 33.5 22 2.1 hi1.4xlarge 35 60.5 3.1 Average Reserved Instance Savings Type % Saving Yr 1 % Saving Yr 3 Light 40 56 Medium 48 65 Heavy 53 70 Know the Units 24 hours /day 168 hours /week 730 hours /month 8,760 hours /year 40 hours working week 173 hours working month 2,076 hours working year
15. Optimise - Rightsize Development Environment : 40 hours per week (24% available time) Load Test : 8 hours / 24 hours one-off Payroll Server : 40 hours per week ‘normal’; 8 hours per month ‘intense’. Backoffice Applications : 40 hours per week ‘heavy’; outside hours 25% capacity Travel E-Commerce Site : Office hours ‘medium’; Evenings + Wknds ‘heavy’; Late night ‘light’.
16. Resources This Deck: blog.cloudvertical.com AWS Economics Centre : http://aws.amazon.com/economics/ Cloudonomics Book: http://www.amazon.com/Cloudonomics-Website-Business-Value-Computing/dp/1118229967 Microsoft Cloud Economics: http://www.microsoft.com/en-us/news/presskits/cloud/docs/the-economics-of-the-cloud.pdf AWS Costs Cheat Sheet: https://blog.cloudvertical.com/2012/10/aws-cost-cheat-sheet-2/ On-Premise vs. Cloud Cost Model: http://andrewmcafee.org/2012/10/mcafee-cloud-costs-google-model