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Effectively using AWS Reserved Instances

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Re: Effectively using AWS Reserved Instances

#61

Post by hueving »

Johnny555 wrote: post #24
eldavido wrote: post #20

Earlier quoted context omitted.

This is terrible advice for all but the largest of organizations. Running your own hardware is AWFUL. Get ready to dedicate an entire team to network engineering, fixing broken hard disks, patching operating systems, screwing around with RAID controllers, upgrading switches, planning power and cooling, and endless vendor negotiation -- with ISPs, hardware manufacturers, datacenter operators, etc. Oh, and did I mentio…

It's been a few years since doing the cost benefit analysis between AWS and self-hosting, but for around 50 racks worth of servers and storage, the numbers came in on AWS's side. That didn't even take into account the "free" multi-region capability you get from Amazon. Splitting our physical servers into a second region with enough capacity to failover would have nearly doubled our costs.

Were those numbers using 50 racks worth of instances (e.g. 20,000 of them) for the comparison? Did you remember to take into account the obscene bandwidth rates (sorry if that seems like a dumb question but I've seen this bite multiple companies moving to AWS)?

The break evens happen a lot earlier in my experience for static workloads, but I would love to see a breakdown if you're willing to share details.

Re: Effectively using AWS Reserved Instances

#62

Post by apple4ever »

Johnny555 wrote: post #24
eldavido wrote: post #20

Earlier quoted context omitted.

This is terrible advice for all but the largest of organizations. Running your own hardware is AWFUL. Get ready to dedicate an entire team to network engineering, fixing broken hard disks, patching operating systems, screwing around with RAID controllers, upgrading switches, planning power and cooling, and endless vendor negotiation -- with ISPs, hardware manufacturers, datacenter operators, etc. Oh, and did I mentio…

It's been a few years since doing the cost benefit analysis between AWS and self-hosting, but for around 50 racks worth of servers and storage, the numbers came in on AWS's side. That didn't even take into account the "free" multi-region capability you get from Amazon. Splitting our physical servers into a second region with enough capacity to failover would have nearly doubled our costs.

I think that would make sense. For us, that need a single rack, it comes out heavily on the data center size. AWS was twice as expensive.

Re: Effectively using AWS Reserved Instances

#63

Post by apple4ever »

eldavido wrote: post #52
hueving wrote: post #21

Earlier quoted context omitted.

Right, you have to do the same capacity planning, but you are getting the massive upside involved in that work instead of Amazon. >What you might save in not paying AWS's profit margin you will probably spend in not being able to be as efficient as they are. This isn't how I've seen the numbers work out for the huge chunk of workloads that require mostly static instances (a.k.a haven't been modernized into a serverle…

I think this is a really illustrative example of how business strategy can influence decision-making. "Paying AWS's profit margin" assumes you can get access to their cost structure. You can't. In order to get AWS's cost structure, you need to (a) be buying servers by the truckload to get volume discounts, (b) have a scaled labor force for physically moving, racking, and installing all of this that's insured, directe…

I disagree. They may have some cost structures you don't, but the profit they are making outweighs that. And staffing isn't really reduce.

At least for us, AWS is twice as expensive as dedicated.

Re: Effectively using AWS Reserved Instances

#64

Post by hueving »

eldavido wrote: post #52
hueving wrote: post #21

Earlier quoted context omitted.

Right, you have to do the same capacity planning, but you are getting the massive upside involved in that work instead of Amazon. >What you might save in not paying AWS's profit margin you will probably spend in not being able to be as efficient as they are. This isn't how I've seen the numbers work out for the huge chunk of workloads that require mostly static instances (a.k.a haven't been modernized into a serverle…

I think this is a really illustrative example of how business strategy can influence decision-making. "Paying AWS's profit margin" assumes you can get access to their cost structure. You can't. In order to get AWS's cost structure, you need to (a) be buying servers by the truckload to get volume discounts, (b) have a scaled labor force for physically moving, racking, and installing all of this that's insured, directe…

Rediculous false choice. You make a huge assumption that aws charges as much as it would cost you to build your own without bulk discounts, etc. They charge way more than that.

I've worked on 40-rack build outs using supermicro without any special pricing that beat the cost of AWS for an equivalent number of reserved instances.

Re: Effectively using AWS Reserved Instances

#65

Post by apple4ever »

jedberg wrote: post #29
hueving wrote: post #21

Earlier quoted context omitted.

Right, you have to do the same capacity planning, but you are getting the massive upside involved in that work instead of Amazon. >What you might save in not paying AWS's profit margin you will probably spend in not being able to be as efficient as they are. This isn't how I've seen the numbers work out for the huge chunk of workloads that require mostly static instances (a.k.a haven't been modernized into a serverle…

You don't have to move all the data, but you have to constantly move the needed data back and forth, unless you store a second copy in the cloud. And then you have to start capacity planning again. > This isn't how I've seen the numbers work out for the huge chunk of workloads that require mostly static instances. Any time someone says this I have to question if they really looked at the "all in" number. Did you incl…

> Any time someone says this I have to question if they really looked at the "all in" number.

Yes we did. > Did you include the salary of the person in purchasing who orders the servers?

That's a one time cost, and very low.

> Did you include the lost engineering time dealing with dead servers (instead of just shutting them off)?

Of course- but AWS has higher engineering costs to make it work, so self-hosting comes out in the end.

> Did you include the cost of spare hardware sitting around for emergencies?

You don't really need spare hardware. You have redundancy and get same day service from your vendors. And hardware nowadays rarely fails.

> Did you include the cost of downtime due to broken hardware while waiting for it to be repaired or replaced?

That would be zero, because a properly designed system has no downtime.

> There are so many other costs to running your own datacenter besides the servers and the space, which Amazon gets to amortize over all their customers, but you have to bear 100% on your own.

Sure, but there are so many other costs to running on Amazon that aren't there with self hosted.

Re: Effectively using AWS Reserved Instances

#66

Post by hueving »

cortesoft wrote: post #37
hueving wrote: post #21

Earlier quoted context omitted.

Right, you have to do the same capacity planning, but you are getting the massive upside involved in that work instead of Amazon. >What you might save in not paying AWS's profit margin you will probably spend in not being able to be as efficient as they are. This isn't how I've seen the numbers work out for the huge chunk of workloads that require mostly static instances (a.k.a haven't been modernized into a serverle…

Are you factoring in the cost of the people to deploy and maintain that infrastructure?

Yep, these people are called sysadmins. With AWS they are the ones who manage firewall rules, patching, etc on your instances as well as API keys etc. Some people like to call them devops because they didn't realize sysadmins could write scripts.

Maintaining 40 racks of hardware takes a surprisingly trivial amount of time aside from regular OS management.

The only products that actually eliminate these folks are things like Lambda + DB as a service.

Re: Effectively using AWS Reserved Instances

#67

Post by dominias »

hueving wrote: post #58
eldavido wrote: post #20

Earlier quoted context omitted.

This is terrible advice for all but the largest of organizations. Running your own hardware is AWFUL. Get ready to dedicate an entire team to network engineering, fixing broken hard disks, patching operating systems, screwing around with RAID controllers, upgrading switches, planning power and cooling, and endless vendor negotiation -- with ISPs, hardware manufacturers, datacenter operators, etc. Oh, and did I mentio…

>This is terrible advice for all but the largest of organizations. Don't start a conversation with an opening generalization like that if you want something constructive. Especially when the rest of your post is clearly based on the single anecdote of your experience. >Running your own hardware is AWFUL. Maybe for you. Not for any sysadmin with even just a couple of years of experience. >patching operating systems We…

You got to accept that building and maintaining data enters are simply an old and obsolete model of doing IT that will eventually go away.

Re: Effectively using AWS Reserved Instances

#68

Post by dominias »

Johnny555 wrote: post #55
jjeaff wrote: post #30

Earlier quoted context omitted.

Why would you compare AWS vs managing your own data center? You could also compare AWS vs building your own silicon. I think it would be better to compare AWS vs renting dedicated servers from a large provider? I think you will find that the scales tip heavily in favor of renting bare metal as far as price is concerned.

Why would you compare AWS vs managing your own data center? Because we were already managing our own data center. I think it would be better to compare AWS vs renting dedicated servers from a large provider? I think you will find that the scales tip heavily in favor of renting bare metal as far as price is concerned. We offloaded a lot of work to Amazon that we were doing ourselves -- database hosting, storage system…

You may be managing your own datacenter but you sure won’t be building any new ones.

Re: Effectively using AWS Reserved Instances

#69

Post by taormina »

sonnyblarney wrote: post #51
alex_young wrote: post #15

The notion that the break even point is 70% is ignoring some really important stuff. If you reserve workload x on hardware y for n years, you're effectively strapping yourself into a sure-to-be-obsolete and more expensive platform which you'll have to then move off of at an arbitrary point n years in the future. If you don't move, you wind up paying a premium to be stuck with the obsolete / more expensive platform ju…

I don't see how arbitrary AWS instances are in any way going to go 'obsolete'. They have been around for a decade and are becoming more and more normative. Second, the underlying financial principle is that with visibility comes lower volatility comes lower cost - that's some very basic financial logic that's at play here. Yes, of course the contract implies a degree of vendor lock-in, but this is inherent in the nat…

No, the GP is referring to things like c3 vs c5 families. When you're locked into the 3 year old hardware, you have to pay the cost of upgrading eventually.

Re: Effectively using AWS Reserved Instances

#70

Post by spookthesunset »

hueving wrote: post #6

The best answer is of course not to at all. Burst into the cloud, static workloads in your own DC.

Opportunity costs are very, very real and very often overlooked when people give this kind of advice. For 95% if all workloads encountered by the types of people who dwell on this forum, there is zero value add in running your own data center.

“Saving money” by running your own servers is penny wise, pound foolish. You’ll never, ever compete with AWS for features or cost.

(And “you” means almost everybody reading this...)

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