Welcome back to Backspace Academy. In this lecture on cloud economics we'll 2
look at all of the tools that are available to present a business case for 3
using the AWS cloud. We'll start off by talking about the six advantages at AWS 4
define of cloud computing. Then we'll talk about the AWS pricing calculator 5
which allows you to estimate the cost on a monthly and yearly basis of using AWS 6
services. Then we'll look at the total cost of ownership or TCO and the tools 7
that are available to allow us to look further into other areas of cost such as 8
overheads including labor, electricity and the like and they can help us to 9
accurately assess the benefits of AWS, as opposed to using our own on-premises 10
servers. We'll look at the Amazon Inspector which is an expert system 11
which allows us to look into our existing infrastructure and identify 12
areas of opportunity and areas of risk. Then we'll look at compliance and all of 13
the tools and resources that are available to help our business to remain 14
compliant with a number of different industry standards, and finally we'll 15
look at all of the available support options for us when we're using the AWS 16
cloud. 17
AWS defines six advantages of cloud computing. The first one there is that 18
we're going to be trading a capital expense for a variable expense. So in the 19
past we would have had to put forward a capital expenditure request to 20
management to purchase these servers, to have them installed, to have them maintained, 21
all of that sort of thing, and then by the time have gone through that process, 22
we may have to go back and redo that all again because we've run out of capacity 23
already, and this way we're going to be swapping that for a variable expense 24
that is going to be able to react according to our business needs. 25
Next we're going to benefit from the massive economies of scale of using this 26
enormous AWS cloud, and those costs that are associated with that AWS cloud are 27
shared amongst millions of users, and so we're not going to be getting a big 28
variation in these costs. It's going to be quite stable over the long term. 29
Next we can stop guessing capacity. We are going to have an elastic infrastructure 30
that can vary according to our needs. We don't need to guess our capacity to 31
purchase fixed assets. We are going to be using a service that is going to be able 32
to accommodate our needs into the future. Next we're going to be increasing our 33
speed and agility to get our services and products to market quickly. We can 34
launch an infrastructure on AWS within minutes and we can be up and running in 35
a very short amount of time. Next we're going to stop spending money 36
on running and maintaining our data centers on-premises. This is a big one 37
because there are a lot of overhead costs that we may not take into 38
consideration when we're implementing an on-premises solution, and that could be 39
anything from insurance costs, to security costs as far as physical 40
security, it could be electricity, a whole heap of 41
things that go into maintaining and running 42
a data center, and finally we can go global in minutes. The AWS cloud has data 43
centers across the globe and we can launch within any part of the globe 44
within a very short amount of time. 45
The AWS pricing calculator allows us to estimate the monthly and 46
annual costs of using individual AWS services. Now please note this was 47
formerly called the simple monthly calculator, so any references to the 48
simple monthly calculator, simply means the AWS pricing calculator. If you want 49
to have a hands-on look at the AWS pricing calculator, and I recommend you 50
do that, just go to calculator.AWS The first step after opening up the 51
pricing calculator is that we need to select the service that we're going to 52
be using, and there are a number of services there available, pretty well 53
the vast range of services that you can get on AWS will be available here on the 54
pricing calculator. After we've selected our service and we can see here we've 55
got the ec2 service up, we can start to define what we're going to be using on 56
that ec2 service. So we can define what the instance type is, what the operating 57
system is and that sort of thing. We've also got the option there of an advanced 58
estimate and that's going to allow us to put more information, for example there 59
we can see that we can put in the workload. So it's going to be constant 60
usage or whether we're going to have spikes in demand and that sort of thing 61
and so we can base our estimate on a schedule or on a consistent usage 62
whatever that may be, and once we've put in all of our information about that 63
service we'll get our estimate, and we can see here we've got the first 12 64
months is going to cost us $1,500. We're going to 65
have a total upfront expenditure there and a monthly cost. So we can save that 66
and we can share with other people. We can export it to Microsoft Excel as a 67
CSV file if we like, and so that is a very quick and easy way if we know what 68
services we're going to be using and how we're going to use them. It's a great way 69
to get a good estimate of what our ongoing costs are going to be. 70
The AWS total cost of ownership or TCO for short, the AWS TCO calculator allows 71
us to compare the costs of running our applications in an on-premises 72
environment or a colocation environment as opposed to running it on the AWS 73
cloud, and it is very good at identifying those costs that are hidden within 74
overheads, that are hidden within IT labor and all these sorts of costs that 75
you may not be aware of. Now one thing that I need to make you aware of is that 76
the TCO calculator has been around for many years and it hasn't changed much 77
over those years, other than some user interface changes 78
and it really doesn't do a lot different to what it did many years ago, and that is, 79
it looks at the cost of on premises, as opposed to using the AWS ec2 service. 80
It does not take into consideration other opportunities such as serverless or 81
using for example Cloudfront to front your infrastructure as well. It purely 82
looks at the ec2 service and the costs involved in using that, as compared to 83
using an on-premises environment, but that said you need to understand this 84
whole concept of TCO and why it is important to not ignore those overhead 85
costs and those IT labor costs that go into a solution on premises 86
as opposed to on AWS. Okay so the total cost of ownership is made up 87
of four main cost centers there being server, storage, network and IT labor costs. 88
Now these server costs, that could consist of hardware such as a servers, 89
racks all of that sort of thing and also the software that is running on that server. 90
So we may require maintenance, it may require licensing and that sort of 91
thing. We have storage there and not only do we have the hardware that is involved 92
with that storage, but we also have administration of it. So that needs to be 93
backed up. We may have compliance costs with 94
that storage as well. The network costs again that's going to have LAN switches 95
and load balancers and all of that sort of hardware, but it's also going to require 96
administration costs as well, monitoring of that network and all of those 97
associated costs, and then the fourth one there is the IT labor cost. So we need to 98
have administration staff that are going to be looking after our service and they 99
need to have training in virtualization and all of that sort of thing. We also 100
need to have specific accounting resources as well to keep track of costs 101
as well. Now within the first three there of server, storage and network, we 102
also have overhead cost that we need to take into consideration. We have the 103
space that is required to store this hardware and to make sure that that is 104
clean and we're going to have costs involved in it, that's going to be rent, 105
so that is a overhead cost that we need to take into consideration. There needs 106
to be power to these servers and storage and there also needs to be cooling to 107
keep this hardware cool as well. So all of those overhead costs need to be taken 108
into consideration and not ignored. After we have entered in the details of our 109
on-premise environment and that will include the number of virtual machines, 110
the CPUs and that sort of thing and also the storage that we're going to be 111
requiring. We can produce a report like this which will be a TCO report that 112
will compare on-premises versus the AWS cloud and the cost savings of doing that 113
and also look at the breakdown of those costs to get a more detailed assessment. 114
What we can do is, we can modify those assumptions that are made by AWS. 115
So AWS will have a standard set of labor costs, electricity costs, 116
network costs and all that sort of thing. We can go in there and we can modify 117
those to specifically what our on-premises costs are, and we can get an 118
even more accurate model. So again take that into consideration. Don't just use 119
the AWS metrics. Use your own labor costs and network costs 120
and that sort of thing as well to make it more accurate. 121
Another great way of reducing those costs of IT labor and resources is to 122
use an expert system such as the Amazon inspector and what that is it's an 123
automated security assessment service. So instead of having a team of people going 124
through your AWS infrastructure and identifying any weaknesses or 125
opportunities within that, the Amazon Inspector can do that automatically for 126
you and that allows you to reduce the costs and increases the efficiency of 127
conducting security assessments and maintaining compliance with any 128
third-party compliance programs. The pricing starts at 30 cents per agent 129
assessment per month, but if you're using it quite a bit, you can take advantage of 130
volume discounting, and that will allow you to achieve as low as five cents per 131
agent assessment per month. So the Amazon Inspector a great service to really 132
identify any critical areas within your infrastructure and also any areas of 133
opportunity not only in security but also in performance as well. 134
The AWS compliance program covers a very broad range of certifications, laws and 135
regulations and frameworks that AWS is compliance with or can help you to 136
become compliant with. For example there, we've got ISO 9000, we've got the payment 137
card industry data security standard as well that AWS is compliant with. We've 138
got the HIPAA out of there that AWS can help you to become compliant with as 139
well. 140
One thing that you need to understand is that AWS may be compliant with a 141
standard or it may be providing a compliance enabling service that can 142
enable you to be compliant with a standard. A good example of that for a 143
compliance service would be PCI DSS level 1. AWS is compliant with that 144
standard. ISO 9001 again AWS is fully compliant with that standard as well. 145
Another compliance and enabling service that AWS provides is for the HIPAA 146
standard, and the reason that AWS cannot provide you with a HIPAA certification 147
as such, is because the HIPAA standard goes into much more than just your 148
back-end services. For example you may have a HIPAA application, some software 149
that you have developed, and that is running on AWS, and the AWS side of 150
things is completely compliant but your actual software may have issues and it 151
may not be compliant, and so from that perspective AWS has provided everything 152
that they can for you to enable compliance, but you still need to do your 153
end of it to to get that HIPAA certification. AWS Artifact is a central 154
resource for compliance related information on AWS. It provides on-demand 155
access to AWS's security and compliance reports and also selected online 156
agreements. Some of the reports that you can download include SOC or PCI reports, 157
and those are accessed quite simply by going to the AWS management console and 158
selecting the report that you want, or searching for that report, and then 159
selecting it and then downloading that report. Ok so when you go to the 160
management console and select AWS Artifact, you can go to the report 161
section, you can search for a report, and so here we are searching for 162
the PCI reports, and we can see there that we've got one, a PCI attestation of 163
compliance or AOC report. We simply select that and we 164
download that report. When we click on download report it will actually not 165
download the report itself, but it will download the non-disclosure agreement 166
for AWS Artifact and attached to that, if you open it in Adobe Acrobat, and you 167
click on the the paper clip, you can see that attached to that will be the 168
reports that you want, and by clicking on those links you will be able to see 169
those reports and download those or print them out or do whatever you 170
want with those. It is one thing to be compliant with a standard at a point in 171
time and it's another thing to be able to maintain compliance with that 172
standard when your infrastructure is changing and your software is being 173
updated, and so that's where AWS Config comes in, and what it is it's a 174
configuration management service running on AWS, and allows you to assess, audit 175
and evaluate the configurations of your AWS resources. It acjieves this by continuously 176
monitoring and recording any changes in your configuration on AWS, based on 177
pre-built rules. Now those rules are supplied by AWS but you can modify those 178
to suit you as well. Those rules can be applied to both network and software 179
configurations. So if you do an update to software and that change is something to 180
do with compliance, based on those rules, then you will be alerted to 181
that change. Multiple rules can be organized into a conformance pack to 182
better organize these rules, and any changes that appear can be identified 183
quickly by simply going to the AWS management console and going to the 184
cloud governance dashboard and seeing those changes. It has multi account and 185
multi region data integration, and so you can apply this across multiple accounts 186
across multiple regions. It is integrated with AWS organization, 187
so you can set up a conformance a pack and apply that to all of your accounts 188
within your organization. 189
There are a number of different support plans available from AWS to help you out 190
when you get into trouble. That consists of a basic, developer, business and the 191
top line there is enterprise, and they vary from free, and that is purely and 192
simply customer service only. There's no technical service. So if you've got a 193
problem with your billing for example then you can get free support on that, 194
but if you want to get technical support then you're going to have to pay for 195
that, and so developer is the the base of that support plan for paid plans and 196
that's going to give you up to 12 hours response to critical failures. Working up 197
to enterprise which is 24/7 technical support from a senior 198
engineer and that will have response to less than 15 minutes to any critical 199
failures. From my experience personally with AWS support, is that these response 200
times that they quote for the most part they do deliver on, but quite often they 201
don't deliver on. So again if you've got an enterprise there and it's saying less 202
than 15 minutes response, it may take them a lot longer than 15 minutes to 203
actually sort out your problem, but it is a very good service to pay for and 204
certainly if you're part of a large organization you certainly should have 205
at the very least a business support plan. If you want to get more details 206
about these support plans go to the AWS website/premiumsupport/ 207
compare - plans 208
If you have a difficult application that you're trying to deploy on AWS, you may 209
want to consider using the AWS professional service, and they are a 210
global team of AWS experts. They work as a collaboration between the client and 211
an AWS partner network or an APN partner, and the AWS professional 212
services team. So if you've got this large application that you want to 213
deploy then you would engage an APN partner, and then the APN partner would 214
work with the AWS professional services team to sort out all of those 215
issues for you. The professional services use a number of different offerings that 216
use a unique methodology based on Amazon's internal best practices and 217
they help you to complete your projects faster and more reliably. 218
The professional services can provide experts in a specific area of AWS and 219
they have global specialty practices that can support your efforts in focused 220
areas of the enterprise cloud computing. For example you might want to obtain the 221
services of a machine learning expert or an Internet of Things or a specific 222
database expert. An AWS professional services can make that happen for you. 223
Okay so that brings us to the end of our discussion on cloud economics and how to 224
present a business case for moving over to AWS. I hope you've got a lot out of it 225
and I look forward to seeing you in the next one.