Making the Cloud Cost Effective

We moved to the Cloud – Hurrah!

Now we can scale! Now we can be cheaper! We can be more efficient!

Famous last words –

The cloud can be all of those things but you have to work at it. You can’t relax and expect your vendor to be cost efficient for you – it’s not in their interests nor do they have the time to give this kind of personal attention to each and every one of their customers.

It’s very easy to relax when it’s so easy to flick a switch and ‘just add a few more servers’ – before you can blink your bill is through the roof and your monthly online spend is making your CFO’s eyes water.

We have reduced our monthly online bill by approximately 35% (give or take) in the last six months yet conversely we are using AWS (Amazon Web Services) much more now than we were when we started the optimisation exercise. Many of the things I will discuss from here on are AWS specific but general principles still apply to other cloud vendors.

How did we do it?

Do you know what your average server utilisation is? The industry average is an eye-watering 5%-10% utilisation!

Be careful when speaking with Cloud vendors about this number – they will happily tell you that they have 100% utilisation. Unfortunately, they often mean something very different when they quote that number. In vendor terms they are quoting the usage of their hardware NOT the utilisation of your virtual instance running on that hardware i.e. They are happy and report 100% as their hardware is running the maximum number of instances they can support – your instance might be one of them and only be running at 5%!

Our number is running at around 15%-20% right now, which is much better, but a long way short of optimal.

There are valid reasons for running at less than 100%, as any competent SysAdmin will tell you. You need to have some capacity in reserve for spikes in demand or load but this does not exonerate the terrible figure we see.

Conduct an exercise with your Systems Team (or whatever they are called) and examine every instance in your cloud and ask the question: is this right-sized (in terms of CPU, Memory AND Storage)? If it’s not then do something about it – now! You can always scale horizontally under load later e.g. auto-scale another webserver when required.

Once you have conducted this exercise you can look at Reserved Instances. This is a euphemism for paying for your usage up-front. You can pay it all up front or some of it up front and get cheaper hourly costs in return. Savings can be anywhere from 30% -50% on your instance costs and this can be big money.

A word of advice – don’t reserve instance types for longer than 12 months even though the savings are higher. You can get trapped on old and clunky instance types while the industry forges ahead of you.

Storage – there are many types of storage available to you and you would be shocked to realise the vast differences in price. You will be less shocked to hear that the default storage that you normally use with your instances (EBS) is the most expensive type!

Your vendor is not necessarily doing a bad thing here – this type of storage is also the safest in terms of redundancy BUT for servers like web servers, when you don’t really need permanent storage, you can discard the EBS and just go with the small, but normally sufficient, amount of ephemeral SSD storage. These savings can be immense.

It turned out that our, very large, collection of assets, images etc., were stored on very large RAIDed arrays of EBS. We moved all of these (and it was painful and required system changes) to S3. While S3 is not as fast as EBS, in these days of caching and CDN’s, the difference to the user at the end-point is non-existent.

Our storage costs have dropped by several orders of magnitude.

There are many other things that you can do, the ones that I have listed are some of the biggies, but the absolute most important thing to do is have awesome Systems or DevOps Teams (I do!) who will be ever vigilant over creeping costs, be always looking for ways to optimize more and who have inculcated an attitude of treating the companies money as they do their own.