© 2015, Amazon Web Services, Inc. or its Affiliates. All rights reserved.

Allan Knudsen, AWS

Henrik Forsberg, MTG

May 2016

Value, TCO & Cost Optimization on AWS

We will be focusing on:

Framing the

value of AWS

AWS & Lower

Costs

Optimize to

drive Value

How to frame the value of moving to AWS?

Start with your goals

“We need to focus on moving our core

business forward — not building and

maintaining infrastructure…”

“Reducing our overall cost is a high priority.”

“We are looking to improve performance and

expand globally in a flexible way.”

Macro goals to move

Analysts have shown AWS Creates Value

Source: IDC, Quantifying the Business Value of Amazon Web Services (May, 2015)

How do customers lower their TCO with AWS?

1

Source: IDC Whitepaper, “The

Business Value of Amazon Web

Services Accelerates Over Time.”

December 2013

“Average of 400

servers replaced per

customer”

Replace up-front

capital expense with

lower “pay for what

you use” variable

cost model

3

Periodic Price

Reductions

Economies of scale

allow AWS to

continually lower

costs

2

Pricing model choice

to support variable &

stable workloads

On-Demand

Reserved

Spot

Dedicated

AWS PRICING PHILOSOPHY

More AWS

Usage

More

Infrastructure

More

Customers

Lower

Infrastructure

Costs

Economies of

Scale

Reduced PricesEcosystem

Global Footprint

New Features

New Services

Infrastructure

Innovation

51PRICEREDUCTIONS

We pass the savings along to our

customers in the form of low

prices and continuous reductions

Let’s Look Into Costs

Comparing TCO is not easy

≠

Lower costs than on-premises

On-premises

traditional

data center

On-premises virtualized

data center

CAPEX

OPEX

OPEX

AWS

CAPEX

OPEX*

Cost savings from running

internal IT more efficiently AWS scale• Multiple new data centers built each year

• Volume purchasing, highly automated, supply

chain optimization

Utilization fundamentally higher in

AWS cloud• Aggregating non-correlated workloads, scale,

spot market

Amazon specific hardware designs• OEM acquisition of custom servers and

net gear

• Direct purchasing of disk, memory, and CPU

• AWS controlled hypervisor and net protocol

layers

Diagram is not to scale

*For AWS, OPEX costs includes Reserved Instances one-time low, up-front payment, if Reserved Instances are used.

Cost savings from moving

to a public cloud provider

TCO The Way Clients Typically See it

Diagram doesn’t include every cost item. E.g. software costs can include database, management, middle tier software costs. Facilities cost can

include costs associated with upgrades, maintenance, building security, taxes etc. IT labor costs can include security admin and application admin

costs.

Hardware – Server, (+Maintenance)Software - OS, Virtualization Licenses

(+Maintenance)

Hardware – Storage Disks

Network Hardware – LAN Switches, Load Balancer

Bandwidth costs

Server Admin Virtualization Admin

1

2

3

4

Server

Costs

Storage

Costs

Network

Costs

IT Labor

Costs

TCO The Way It Is = Acquisition + Operational Costs

Diagram doesn’t include every cost item. E.g. software costs can include database, management, middle tier software costs. Facilities cost can

include costs associated with upgrades, maintenance, building security, taxes etc. IT labor costs can include security admin and application admin

costs.

Hardware – Server, Rack

Chassis PDUs, ToR

Switches (+Maintenance)

Hardware – Storage Disks,

SAN/FC Switches

Network Hardware – LAN

Switches, Load Balancer

Bandwidth costs

Server Admin Virtualization Admin

1

2

3

4

Server

Costs

Storage

Costs

Network

Costs

IT Labor

Costs

Software - OS, Virtualization

Licenses

(+Maintenance)

Storage Admin costs

Network Admin Costs

Facilities Cost

Space Power Cooling

Facilities Cost

Space Power Cooling

Facilities Cost

Space Power Cooling

Tools for cost analysis

• TCO Calculator

• Total Cost of Ownership comparison tool

• Simple Monthly Calculator

• Calculate your monthly AWS costs

Traditional Capacity Planning

Limitations of traditional data centers:

Inflexible physical assets Costs are never in sync

Migration and expansion

costs are high

Cost of unexpected

inefficiencies

Benefits of elastic and Pay-Per-Use Infrastructure

Unable to

serve

customers

Infrastructure

Cost $

time

Large

Capital

Expenditure

Opportunity

Cost

Predicted

Demand

Traditional

Hardware

Actual

Demand

Automated

Virtualization

Even after initial deployment,

AWS continues to drive down

costs

The Value of Using AWS Accelerates Over Time

Source: IDC Business Value of AWS Accelerates over time

According to IDC, this relationship between length of time using AWS and return is due to customers leveraging the more optimized

environment to generate more applications along a learning curve.

$1 Investment in AWS

$8.40 in benefits

At 60 Months of using AWS

~8X$3.50 in benefits

$1 Investment in AWS

At 36 Months of using AWS

~3X

Upgrades are your responsibility Upgrades happen automatically

On-premises infrastructure

VPC support

With AWS, Service Upgrades occur automatically

Managed services eliminate many operational tasks

Do-it-yourself MySQL replication

Potentially ~100+ manual steps

Set up primary and standby instances

Set up identical volumes

Create synchronous replication

Create and manage DNS entries

Detect instance failure conditions

Detect network failure conditions

Detect storage failure conditions

Decide when to fail over….

Re-establish primary secondary connections.

Amazon RDS Multi-AZ

HA with a mouse click

Extending from TCO to Cost

Optimization

The Four Pillars of Cost Optimization

Right Sizing Reserved

Instances

Increase

Elasticity

Measure,

Monitor, &

Improve

Right Sizing

Right Sizing

• Selecting the cheapest instance available

while meeting performance requirements

• Looks at CPU, RAM, storage, and network

utilization to identify potential instances that

can be downsized

• Leverage CloudWatch Metrics and set up

custom RAM metric

Rule of thumb: Right size, then reserve.

Reserved Instances

Commitment Level

1 Year

3 Year

AWS Services Offering RIs

Amazon EC2

Amazon RDS

Amazon DynamoDB

Amazon Redshift

Amazon ElastiCache

* Dependent on specific AWS Service, size/type and Region

Increase Elasticity

Turn off non-production instances

• Look for dev/test, non-prod instances that are

running always-on and turn off

Autoscale Production

• Use Autoscaling to scale up and down based

on demand and usage (e.g. spikes)

Rule of thumb: Shoot for 20-30% of EC2

instances running on demand to be able to

handle elasticity needs.

Using Right Sizing and Elasticity to Lower Cost

More smaller instances vs. less larger instances

29 m4.large @ $0.126/hr.

$2,630.88 / mo*

59 t2.medium @ $0.052/hr.

$2,203.20 / mo*

*Assumes Linux instances in US-East at 720 hours per month

AWS Trusted Advisor: Automated Cost Optimization and Advice

2,600,000+recommendations

$350M+in cost reductions

To: AWS Customer

From: Amazon Web

Services

Subject: Potential Cost

Savings

Dear Customer,

We have identified $49,000 of

potential savings in your current

To: AWS Customer

From: Amazon Web

Services

Subject: Potential Cost

Savings

Dear Customer,

To: AWS Customer

From: Amazon Web Services

Subject: Potential Cost Savings

Dear Customer,

We have identified $49,000 of potential savings

in your current AWS deployment.

-Amazon Web Services

“AWS rang me up and said they were cutting my costs by $30,000 a month. In

all my years in IT I have never had a supplier ring me up and say that. It never

happens. Now we can invest that cash into new product development and turn

it into revenue.”

- News UK IT Director, Chris Birch

The Value of Innovation

Innovate by increasing the ability to “Fail Fast”

20 new projects

10

2

IT Project funnel

Increase the # of new projects in the funnel

Increase the speed by which projects move through the funnel

Decrease the downside impacts of project “failures” (shut ‘em down quick)

Keep costs low for the successes

Web links for more information

AWS Economics Center:

• aws.amazon.com/economics

• Includes link to TCO Calculator

• Link to the IDC report

Case Studies & References:

• aws.amazon.com/solutions/case-studies

Henrik Forsberg

Head of MTGIQ – Group Data, BI & Analytics

2016-05-04

Breaking Down the Economics

and TCO of Migrating to AWS

• Launched TV3 in 1987 as the first commercial TV

channel in Scandinavia and the first privately owned

channel

• Satellite broadcasting covering Scandinavia,

Eastern Europe and Russia

• Free-TV channels in 11 countries and Pay-TV

platforms and packages in 8 countries

• More than 25 productions companies

• + 100 TV channels

• Net sales 16.218 MSEK (2016)

• EBIT 1.268 MSEK (2016)

MTG

CHANGE!

HOW WE DEAL WITH IT

DEEPER UNDERSTANDING OF CUSTOMERS & CONTENT

• Align data across business areas

• Accelerate data driven decision

making

• Support the change of business

behavior

• Build for various types of insights

from the very beginning

• Feeding data back to consumer

products

HOW TO GET STARTED?

1. Applications

2. Hardware

3. Installation & configuration

4. Development

5. Operations & maintenance

Resources?

Costs & structure?

Organization?

Time & Deliveries?

Priorities?

Long-term ambition?

Data volumes?

Flexibility?

CURRENT SETTING

EMR

RedshiftS3 EC2EC2

S3

”Data In” ”Data Out”

EC2

SQS

• 80% of annual budget on new

development

• 10% of annual budget spent on

hardware, infrastructure, config.

• No capital investments

• Affordable to make adjustments

• No performance issues

HIGHLIGHTS

Thank you!henrik.forsberg@mtg.com

www.mtg.com/jobs

Henrik & Allan