How To Plan an RI Purchase in 6 Steps

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[originally posted on LinkedIn Pulse @ http://linkd.in/1H5Kvvr]

Do Reserved Instances make you anxious? They shouldn’t.

A lot of people get caught up in all the different possible reservations you can purchase and wait months before making their first purchase.

Don’t do that.

Below is all you need to start saving money and take advantage of Amazon’s capacity guarantee today.

Step 1: Arrange Your Instances by Their Purpose

How do you group your infrastructure? By project, environment or application? Great. Put them all together and separate by OS and move on to step 2. If you mix Windows and Linux instances, it will complicate the entire process because of licensing and pricing differences.

Step 2: Figure Out the Cost

Once you’ve organized your instances into groups by their purpose, figure out what your current on-demand costs are and arrange your groups in descending order.

Step 3: Find Out Who Makes the Cut

Eliminate any groups or instances that won’t be running more than 65% of the time. Also eliminate any that you don’t expect to be running 1 year from now.

Step 4: Figure Out Where Your Reservations Will Reside

Once you’ve figured out the region (e.g. us-east-1 or us-west-1), you’ll need to specifically choose the availability zone where you currently have the most on-demand usage (e.g. 1a or 1b).

You’ll also have to choose whether they will reside within a VPC or in classic EC2 mode. For most newer customers your infrastructure will most likely already be in a VPC.

Step 5: Decide How Much You’re Going to Give AWS Upfront

Sometimes the increased savings you reap from all upfront reservations are not enough to justify their initial upfront fee. The table below shows how purchasing an all upfront m3.large reservation will cost $308 ($751-$443) more and only offer 2% more in monthly savings. Obviously the number of reservations will affect the dollar amount savings, so make sure to do the math regardless.

Step 6: Determine the Purchasing Account

Do you have more than one account linked to a consolidated bill?

You should:

a)   Purchase in the consolidated account if you don’t care about the capacity reservation. This option simplifies the purchase and management of reservations, but you’re not guaranteed to be able to launch an instance based on a reservation in a linked account if the reservation was made in another account.

b)    Purchase in the linked accounts if you want to receive the cost and capacity reservation of the RI, although the planning process will be significantly more complex. Note: Other accounts can still benefit from the associated discount if a valid instance isn’t running in the purchasing account.

Based on experience, the best advice I can give is to purchase reservations on an account-by-account basis.

Don’t want to spend all this time to model out your purchase? I don’t blame you. I used to do it before we released the RI Optimizer. Have it plan your most cost-optimal purchase in seconds.

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Reserved Instances Shouldn’t Give You Cold Feet

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Keeping costs under control as your cloud infrastructure scales is no easy feat. To balance the two challenges, Reserved Instances provide substantial cost and capacity benefits. Their pricing discounts can even “float” across accounts that are linked to the consolidated bill to get the most of our your investment.

Afraid of Commitment? Don’t Be.

Although many fear overcommitting to Reserved Instances, a 1-year term reservation will almost always break even after 6 months. This is the point at which you can stop using that instance and still benefit from the reservation’s pricing discount. For a 3-year reservation, this break-even point typically occurs around 9 months.

With that said, if you’re worried about your usage needs changing down the road, it’s easy to determine whether reservations can still be more cost-effective than on-demand pricing. If all that concerns you is the instance type or availability zone, AWS makes it simple to modify reservations. In the worst case scenario, you could always sell them on the Reserved Instance Marketplace, provided you have a US bank account.

Pay Attention to the Payback Period

Taking this into consideration, the cost benefits become very apparent to organizations with infrastructure that is always-on. Using the effective rate formula we can easily calculate the exact number of months at 100% usage we need before we receive a price benefit. We call this the payback period. This metric is invaluable for mitigating the risks of reservations by identifying how long you must actually use them before they break even. It’s calculated by comparing the cash outlay for on-demand usage and the proposed offering over each month in a term, and then identifying the month at which the cost for the on-demand instance usage exceeds the cost for the reserved offering. There is no payback period for a no-upfront reservation, since they are less expensive than on-demand immediately.

Let’s take a look at just how cost-effective reservations can be over time. With a 1-year upfront reservation for an m3.large instance in the us-east-1a region you can expect to save 37% per month!

effective rate = upfront payment / reservation term / interval + recurring usage charges for interval

While the effective cost per month savings are certainly significant, let’s take a look at one of the more confusing behaviors of RI’s – their ability to “float” across accounts.

What Happens When My Reservations “Float”?

By default, reservations have a tendency to satisfy the needs of the account in which they were purchased. However, if there is no instance usage in a given hour in the purchasing account, the reservations can “float” to a linked account to take advantage of the reservation.

While the price reduction benefits of RIs “float”, it’s important to note that the capacity reservation does not. Therefore, if you have an available reservation in account A but want to launch an equivalent instance in account B, you have no guarantee that sufficient capacity will be available.

Stay tuned for the next post on the best practices of RI management – from modeling purchases to modifying them and beyond.

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Apple’s “Grey Screen of Death”

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It was only a few years ago when the dreaded, and all too common, Windows blue screen of death elicited the “you should just get a Mac” jeer from your friends.

While I still love my Macbook, I can’t help but notice performance issues on the rise across Apple’s luxury electronics.

In the issue at hand, my Macbook Air will freeze for about 5 seconds before jolting to the grey screen shown below:TS3742-ML_Panic-001-en

What’s even more interesting is that I’ve heard from colleagues and friends that they’re experiencing the same issues recently (all on OSX 10.10, Macbook Airs with the HD4000 integrated graphics card). The error that’s in all my logs is “BSD process name corresponding to current thread: Google Chrome He”. I am always using Chrome (when is it not open?) when this issue occurs but am not sure if it’s Chrome, OS X or the graphics card.

Has this been happening to anyone else? Will post a solution when one is to be had.

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Demystifying Reserved Instances

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Everyone talks about them, many reserve them but there’s still quite a bit of mystery surrounding how they actually work. As long as the bill is paid and your application isn’t down, many don’t think twice about them. But, in order to maximize your ROI, there’s a few important concepts to be conscious of in your cloud strategy.

What Are They?

AWS Reserved Instances (RIs) allow you to make a time and cost commitment to AWS to use specific instance types in return for a discount on the on-demand cost. The other, sometimes overlooked, major benefit is, of course, the capacity reservation. While spot instances can and will be terminated at the drop of a hat, on-demand instances provide an hourly capacity guarantee but reserved instances ensure that your workloads will run uninterrupted for the length of your 1 or 3 year reservations.

How Do They Differ from On-Demand Instances?

It is a common misconception that RIs are directly connected to specific launched instances. They are not. Instead, they are a simply pricing discount applied to any instance usage of a specific type (e.g. m3.large in us-east-1a running Linux). In other words, all usage is always billed at the on-demand rate. If you launch an instance that matches the example instance type, region, availability zone and operating system, at the end of the month you will be billed within the discounted percentage shown above, rather than the base on-demand amount. That’s it.

How Do They Reduce My Cost?

RI Pricing

Think back to a time before landline phone plans included unlimited long distance minutes. Imagine a telephone service that charges $.05 per minute of usage, but $0.02 per minute to certain locations, provided that you subscribe to a particular plan. Once you’ve prepaid for a reservation, your hourly charges (think phone minutes) will be billed at a reduced rate, but only for calls within a certain region. Call one (think: launch an instance) that is outside of your subscription area (read: instance type, region, AZ and OS) and you won’t receive the discount that you signed up for. Because of this, it is critical to understand your instance usage by several factors, in order to maximize your return on investment.

Which Instance Gets The Discount?

Since multiple different reservation types (upfront amount and reservation term) and instance usage can match, the selection of a reservation gives preference toward applying the lowest hourly rate first. It’s also worth noting that reservations have an affinity toward the account in which they were purchased, although they can “float”. Assuming that you have more on-demand hours of usage for a different instance type of the same family, or even in a different AZ, reservations can be “modified” so that you receive the optimal cost benefit (more about this in a future post).

This randomized approach of RIs is both a powerful feature and a source of constant confusion. What I hear most from customers is that they purchased RIs for a specific environment or department, only to find out come bill time that its cost benefit has been applied elsewhere.

Keep your eye out for my next post on how reservations work with a consolidated bill and what it means when they “float”.

In the meantime, do you leverage RIs? If so, how are you managing them?

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New Time Proposed Bug – Gmail

How many times have you had someone propose a new time to a previously scheduled meeting only to have to go back and forth to figure out which time they actually proposed because of a Gmail bug?

This happens to me at least once a week, but luckily there is a workaround.

What typically happens is that someone using another mail client, such as Outlook, suggests a new time for a meeting you scheduled using Google Calendar but the e-mail you receive does not show the new time.

New Time E-Mail

 

However, if you open the message in a mail client such as Apple Mail, you’ll see that there is an attached .ics file.

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Click on it once to highlight (don’t double click as it will open it up in Apple Calendar) and then press the spacebar to see the newly proposed time.

New Proposed Time

 

Has this helped you? Let me know in the comments!

 

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Shakshouka

A typical Israeli dish just very well could be the most hearty, healthy and filling egg breakfast you could ever wish for on a weekend morning.

Give it a shot and be pleasantly surprised.

Shakshouka

Ingredients:
Extra-Virgin Olive Oil
4 Eggs
1 Large Onion
1 Whole Pepper (any color)
4 Cloves of Garlic
Tomatoes or Canned Tomatoes
Crumbled Cheese (Goat, Feta, Parmigiana)
Coarse Sea Salt
Freshly Cracked Black Pepper
Cumin
Paprika
Ground Cayenne Pepper
Cilantro

The long simmering of the onions and peppers along with the cumin, paprika and cayenne pepper spice mix really lend a unique flavor to this dish.

Preparation:

Preheat oven to 350ºF (190ºC).

Slice the onions lengthwise and cut the pepper into long slivers.
Crush two cloves of garlic with the back of a knife and mince. Slice the other two thinly.
Quarter the tomatoes. If using canned (preferably San Marzano), leave as is.
Set aside 1 teaspoon of both the cumin and paprika and a 1/2 teaspoon of the cayenne pepper.
Mince a bunch of cilantro.

Directions:

  1. Heat a medium sized pan (stainless steel or nonstick) over medium heat. Once hot, coat the bottom with extra virgin olive oil.
  2. Allow the oil a minute or two to heat up and add the onions and peppers. Let sit for 20 minutes stirring every 5 minutes or so.
  3. After the onions and peppers have softened and the aroma has filled your kitchen, add in the minced and sliced garlic cloves. Savor the fragrance and add the sea salt to taste.
  4. After one minute, add the spices and stir. Do not allow the garlic to burn.
  5. Once the spices are mixed well, add the tomatoes and freshly cracked black pepper. Let sit another 10 minutes, again stirring frequently.
  6. At this point, you should have a thickened red sauce. If not, let sit another 5-10 minutes. Once reduced, use a wooden spoon to make 4 holes in a diamond pattern, one at a time, in the sauce and crack an egg into each.
  7. Cover with crumbled cheese of your choice and move from stovetop to oven. Let bake 7-10 minutes. Once removed, top with minced cilantro and serve.

Enjoy and let me know your thoughts!

 

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Cloud Autonomics is the Future

re:Invent 2014 was certainly full of many surprises such as Lambda, AWS Config, RDS for Aurora and, of course, AWS’s commitment to the enterprise.

One of the biggest takeaways for my company was that while there are many cost optimization tools on the market, cost is just one of the features of our management platform. We’re all about optimization across all aspects of your infrastructure such as:

  • Cost
  • Availability
  • Usage
  • Performance
  • Security

Using a holistic approach, we not only deliver value through analysis and reporting for the CTO/CIO and their management team but we take it a step further and suggest the most optimal infrastructure recommendations. From there, we automate the changes and govern via policy driven actions. “It’s like Chef for the CIO” as my CTO is keen on saying (3:30 in the video). Check out his interview with Ofir Nachmani of @iamondemand below…

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2015 and the Cloud

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With the New Year just days away, I hope that everyone is enjoying the holidays in the company of family and friends.

As we near the end of an exciting year in cloud, I’d like to reflect a little on what has been and what is to come. Since its introduction in 2006, there’s no doubt that the cloud is growing up. In 2012, the cloud was still a buzzword downplayed by naysayers. In 2013, cost analysis tools sprung up to help organizations leverage the cloud the way it advertised itself: cost effectively. This year, we witnessed the rise of AWS competitors like Microsoft, IBM and Google and DevOps became a part of enterprise vocabulary.

Here at the end of 2014, it’s clear that not only is the cloud here to stay, but it is a prevailing technology changing the way that businesses operate, enabling scalability at a level never before possible.

With AWS still the dominant cloud provider (see image below), 2015 will usher in a year of increased competitiveness as many businesses look to diversify their cloud (private and public) and run them in tandem based on workload.

CIS_2014_Q3

While Microsoft and IBM’s entrance into the cloud vendor space validated the cloud’s existence, it also underlined a new shift – enterprise adoption. Although AWS built itself upon startup infrastructure, this year’s re:Invent conference featured plenty of “all-in” stories and enterprise lingo (predictability, manageability, security, availability, etc) as Amazon seeks the enterprise seal of approval. As enterprises begin the transition to the cloud in 2015, it will be interesting to see how the deeply cultivated relationships and bottomless pockets of IBM and Microsoft affect the current market share.

No matter how long the transition takes, a few things are for sure:

2015 will be full of price wars… again. Backup as a business is not sustainable on its own and the leaders are all in a race towards achieving the greatest economies of scale. The winner takes all.

Docker containers will ship everywhere. Amazon, Google, Microsoft, eBay are already onboard.

The hybrid cloud will finally be a thing. But companies will need a consolidated single pane of glass view across all of them in addition to the ability to shift workloads automatically to and from and to automate manual tasks like killing underutilized infrastructure (one ring to rule them all).

Cloud hacks will be unavoidable. Governance failures, poor management and lax security will be the biggest culprits.

8 years after the cloud’s introduction, we’re set for its biggest year yet. Hold on tight…

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Hello world!

I thought by the end of 2014 I should have a blog in place for 2015. This blog will feature cloud and tech news, linguistics, and food…at least to start!

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