Module 2 - Cloud Economics and Billing

Section 1: Fundamentals of pricing

AWS pricing model

Three fundamental drivers of cost with AWS:

1. Compute
   • Charged per hour/second
   • Varies by instance type
2. Storage
   • Charged typically per GB
3. Data transfer
   • Outbound is aggregated and charged
   • Inbound has no charge (with some exceptions)
   • Charged typically per GB

How do you pay for AWS ?

Pay for what you use

Pay only for the servuces that you consume, with no large upfront expenses

Pay less by using more

Realize volume-based discounts:

• Savings as usage increases
• Tiered pricing for services like Amazon Simple Storage Service (Amazon S3), Amazon Elastic Book Store (Amazon EBS) or Amazon Elastic File System (Amazon EFS)
  $\to$ the more you use, the less you pay per GB
• Multiple storage service deliver lower storage costs based on needs

Pay even less as AWS Grows

• AWS focuses on lowering cost of doing business
• This pratice results in AWS passing savings from economies of scale to you
• Since 2006, AWS has lowered pricing 75 times (as of Septembre 2019)
• Future higher-performing resources replace current resources for no extra charge

Custom pricing

• Meet varying needs through custom pricing
• Available for high-colume projects with unique requirements

AWS Free Tier

Enables you to gain free hands-on experience with the AWS platform, products and services. Free for 1 year for new customers

Services with no charge

Module 2: Total cost of Ownership

On-premises versus cloud

What is Total Cost of Ownership (TCO) ?

Total Cost of Ownership (TCO) is the financial estimate to help identify direct and indirect costs of a system.

Why use TCO ?

• To compare the costs of running an entire infrastructure environmnet of specific workload on-premises versus on AWS
• To budget and build the business case for moving to the cloud

TCO Consideration

On-premises versus all-in-cloud

You cloud cave up to 96 percent a year by moving your infratstructure to AWS. Your 3-year total savings would be $159,913

AWS Pricing Calculator

Use the AWS Pricing Calculator to:

• Estimate monthly costs
• Identify opportunities to reducse monthly costs
• Model your solutions before building them
• Explore price points and calculations behind your estimate
• Find the available instance types and contract terms that meet your needs
• Name your estimate and create name groups of services

Reading an estimate

Your estimate is broken into:

• first 12 months total
• total upfront
• total monthly

Additional benefit considerations

• Cloud Total Cost of Ownership: what will be spent to run the solution
• Return on Investement analysis (ROI): determine the value generated while considering savings
  $\to$ soft and hard benefits

Hard benefits	Soft benefits
Reduced spending on compute, storage, networking, security	Reuses of service and applications that enabl you to define (and redefine solutions) by using the same cloud service
Reductions in hardware and softare purchases (capex)	Increased developer productivity
Reductions in operational costs, backup, and disaster recovery	Improved customer satisfaction
Reduction in operations personnel	Agile business processes that can quickly respond to new and emerging opportunities
	Increase in global reach

Case study: Delaware North

Background:

• Growing global company with over 200 locations
• 500 million customers: $3 billion USD annual revenue

Challenge:

• Meet demand to rapidly deploy new solutions
• Constantly upgrade aging equipment

Criteria:

• Have a broad solution to handle all workloads
• Be able to modify processes to improve efficiency and lower costs
• Eliminate busy work (such as patching software)
• Achieve a positive return on investment (ROI)

Solution:

• Move their on-premises data center to AWS
  • Eliminated 205 servers (90%)
  • Moved nearly all aplications to AWS
• Used 3-year Amazon ECE2 Reserved Instances

Cost comparison

Results

Section 3: Billing

AWS Organizations: account management service to consolidate multiple AWS accounts

• a branch can have only one parent

Key features and benefits

• Policy-base account management
• Group based account management
• APIs that automate account management
• Consolidate billing

Security with AWS Organizations

• Control access with AWS Identity and Access Management (IAM)
• IAM policies enable you to allow or deny access to AWS services for users, groups and roles
• Service control policies (SCPs) enable you to allow or deny access to AWS services for individuals or group accounts in an organizational unit (OU)

Organization setup

Accessing AWS Organizations

• AWS Management Console
• AWS Command Line Interface (AWS CLI) tools
• Software development kits (SDKs)
• HTTPS Query application programming interfaces (API)

Section 4: AWS Billing and Cost Management

AWS Billing Dashboard

Spend summary: how much you spent last month
Month-to-Date spend by service: services most used

Tools

• AWS Budgets
• AWS Cost and Usage Report
• AWS Cost Explorer

Monthly bills

Cost Explorer

Forecast and track costs

Cost and usage reporting

Section 5: Technical Support Models

AWS Support

• Provide unique combination of tools and expertise:
  • AWS Support
  • AWS Support Plans
• Support is provided for:
  • Experimenting with AWS
  • Production use of AWS
  • Business-critical use of AWS
• Proactive guidance
  • Technical Account Manager (TAM)
• Best practices:
  • AWS Trusted Advisor
• Account assistance
  • AWS Support Concierge

Support plans

AWS Support offers four support plans:

• Basic Support: Resource Center access, Service Health Dashboard, product FAQs, discussion forums, and support for health checks
• Developper Support: Support for early development on AWS
• Business Support: Customers that run production workloads
• Entreprise Support: Customers that run business and mission-critical workloads

Case Severity and response times

Wrap-up

Sample exam question

Which AWS service provides infrastructure security optimization recommendations ?

1. AWS Price List Application Programmin Interface (API)
2. Reserved Instances
3. AWS Trusted Advisor
4. Amazon Elastic Comput Cloud (Amazon EC2) Spot Fleet

Answer

Keyword: recommendations

Answer: 3.