Hey!
As we know,
one of the main rules for using cloud services is the total optimization, and in
particular optimization of the financial side.
Amazon Web Services has three main methods
for service cost optimization:
· Auto scaling
· Reservation
·
Use of spot instances
Today I will tell about the reservation in EC 2, how, what and why you must do it.
Reservation — is the advance payment for server capacities, which allows you to reduce costs considerably for these very capacities. There are three Reservation types:
· Light Utilization
· Medium Utilization
· Hard Utilization
· annual
· triennial
Economic justification
The basic principle for choosing
the right type of Reservation: the longer your Server works, the more expensive
reservation you need to buy. Let’s perform a test. We will take one Server with M1.XLarge size and
run it. Depending on the number of hours the server is going to work a day, we
can calculate the total sum we need to pay for it for one year and for three
years. So, as of today the prices are the following:
The model used
|
1 year
|
3 years
|
||
Advance payment
|
Per hour
|
Advance payment
|
Per hour
|
|
On-demand
|
$0.52
|
$0.52
|
||
Light Utilization Reservation
|
$552
|
$0.392
|
$850.40
|
$0.312
|
Medium Utilization Reservation
|
$1280
|
$0.248
|
$2000
|
$0.20
|
Hard Utilization Reservation
|
$1560
|
$0.20
|
$2400
|
$0.16
|
Yearlong test
The yearly cost is calculated using the following formula:
YC=H*365*С+R, where
YC — Yearly cost
H — the number of hours the server works a day
С — hour cost
R — reservation cost
Let’s take the column “1 year” in the pricelist and draw a table in relation to the number of hours when the instance was started:
One year, $
|
||||
Hours per day
|
On demand
|
Light
|
Medium
|
Hard
|
1
|
189.80
|
665.88
|
1,350.08
|
2,681.28
|
2
|
379.60
|
779.76
|
1,420.16
|
2,681.28
|
3
|
569.40
|
893.64
|
1,490.24
|
2,681.28
|
4
|
759.20
|
1,007.52
|
1,560.32
|
2,681.28
|
5
|
949.00
|
1,121.40
|
1,630.40
|
2,681.28
|
6
|
1,138.80
|
1,235.28
|
1,700.48
|
2,681.28
|
7
|
1,328.60
|
1,349.16
|
1,770.56
|
2,681.28
|
8
|
1,518.40
|
1,463.04
|
1,840.64
|
2,681.28
|
9
|
1,708.20
|
1,576.92
|
1,910.72
|
2,681.28
|
10
|
1,898.00
|
1,690.80
|
1,980.80
|
2,681.28
|
11
|
2,087.80
|
1,804.68
|
2,050.88
|
2,681.28
|
12
|
2,277.60
|
1,918.56
|
2,120.96
|
2,681.28
|
13
|
2,467.40
|
2,032.44
|
2,191.04
|
2,681.28
|
14
|
2,657.20
|
2,146.32
|
2,261.12
|
2,681.28
|
15
|
2,847.00
|
2,260.20
|
2,331.20
|
2,681.28
|
16
|
3,036.80
|
2,374.08
|
2,401.28
|
2,681.28
|
17
|
3,226.60
|
2,487.96
|
2,471.36
|
2,681.28
|
18
|
3,416.40
|
2,601.84
|
2,541.44
|
2,681.28
|
19
|
3,606.20
|
2,715.72
|
2,611.52
|
2,681.28
|
20
|
3,796.00
|
2,829.60
|
2,681.60
|
2,681.28
|
21
|
3,985.80
|
2,943.48
|
2,751.68
|
2,681.28
|
22
|
4,175.60
|
3,057.36
|
2,821.76
|
2,681.28
|
23
|
4,365.40
|
3,171.24
|
2,891.84
|
2,681.28
|
24
|
4,555.20
|
3,285.12
|
2,961.92
|
2,681.28
|
If we choose Heavy Utilization Reservation, we will pay for the instance even if it is not working, which means its price per year is straight.
On the
basis of this table let’s make the following graph:
As we can see, On-Demand is the
cheapest option with up to 7 hours inclusively per day, which requires no
advanced payment. In case the Server is used for more than 8 hours, it makes
sense to buy Light Utilization
Reservation, then Medium Utilization Reservation,
and finally Heavy Utilization Reservation.
We recommend creating a template in a table editor for every instance type you use to define the most profitable reservation strategy.
Summary
When you
plan to use your server from one up to seven
hours a day, you’d better not make any
advanced payments. If you plan to use it from seven up to fifteen
hours a day, it is reasonable to order Light Utilization Reservation, and Medium Reservation in case when you plan to use it from sixteen up to nineteen hours. If you plan to run the server for more than nineteen hours a day, it is better to buy
Hard Utilization Reservation.
Triennial test
The same test, but only for triennial reservation. The costs table is provided below:
Three Years, $
|
||||
Hours per day
|
On demand
|
Light
|
Medium
|
Hard
|
1
|
569.40
|
1,121.96
|
2,166.44
|
5,133.12
|
2
|
1,138.80
|
1,393.52
|
2,332.88
|
5,133.12
|
3
|
1,708.20
|
1,665.08
|
2,499.32
|
5,133.12
|
4
|
2,277.60
|
1,936.64
|
2,665.76
|
5,133.12
|
5
|
2,847.00
|
2,208.20
|
2,832.20
|
5,133.12
|
6
|
3,416.40
|
2,479.76
|
2,998.64
|
5,133.12
|
7
|
3,985.80
|
2,751.32
|
3,165.08
|
5,133.12
|
8
|
4,555.20
|
3,022.88
|
3,331.52
|
5,133.12
|
9
|
5,124.60
|
3,294.44
|
3,497.96
|
5,133.12
|
10
|
5,694.00
|
3,566.00
|
3,664.40
|
5,133.12
|
11
|
6,263.40
|
3,837.56
|
3,830.84
|
5,133.12
|
12
|
6,832.80
|
4,109.12
|
3,997.28
|
5,133.12
|
13
|
7,402.20
|
4,380.68
|
4,163.72
|
5,133.12
|
14
|
7,971.60
|
4,652.24
|
4,330.16
|
5,133.12
|
15
|
8,541.00
|
4,923.80
|
4,496.60
|
5,133.12
|
16
|
9,110.40
|
5,195.36
|
4,663.04
|
5,133.12
|
17
|
9,679.80
|
5,466.92
|
4,829.48
|
5,133.12
|
18
|
10,249.20
|
5,738.48
|
4,995.92
|
5,133.12
|
19
|
10,818.60
|
6,010.04
|
5,162.36
|
5,133.12
|
20
|
11,388.00
|
6,281.60
|
5,328.80
|
5,133.12
|
21
|
11,957.40
|
6,553.16
|
5,495.24
|
5,133.12
|
22
|
12,526.80
|
6,824.72
|
5,661.68
|
5,133.12
|
23
|
13,096.20
|
7,096.28
|
5,828.12
|
5,133.12
|
24
|
13,665.60
|
7,367.84
|
5,994.56
|
5,133.12
|
Below is the graph based on this table:
Summary
In a three-year period, the usage of reservation is not justified when the instance runs up to three hours a day. For three and up to ten hours, it is better to use Light Utilization Reservation, and buy Hard Utilization Reservation in case of more than ten hours a day.
Apparently,
Medium Utilization Reservation in
both cases is a medium variant, as it
has more advantages than Light Utilization Reservation, but is cheaper
than Hard Utilization Reservation at the beginning. This seems to be the only
intended use of Medium Utilization
Reservation.
Conclusion
So, by looking at the calculation results you can see the reason why it is simply necessary to use Reservations. According to our example, during constant use of the server for a year you can save :
($4,555.20 — $2,681.28) / $4,555.20 * 100% = 41%
For 3 years:
($13,665.60 — $5,133.12) / $13,665.60 * 100% = 62%
The figures are impressive, aren’t they?
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