OK hello cloggers and welcome to this lecture this lecture is on the fourth pillar of the world architected
framework and this is about cost optimization and we all like to optimize our costs and get as low as
possible.
So you should use the cost optimization Pillot to reduce your costs to a minimum and then use those
other savings for other parts of your business cost optimize system allows you to pay the lowest price
possible while still achieving your business objectives.
And like I said in The Last Lecture guys at a club Guria we built our platform on service technology
and this allows us to have an extremely low cost platform and then we can parse these cost savings on
to you.
That's why we're one of the cheapest.
You know education companies out there and you know I like to think it's really good quality as well.
We could charge a premium but we don't because we've built this on you know on service technology and
we like to pass that back to our customers.
If it was entirely up to me I'd make this all free.
But you know we do have staff and businesses to run so we don't have to charge a little bit to cover
our costs but we do try and keep it as low as possible and then try and reach as many people as possible
on a huge sort of advocate of making education as close to free as possible you shouldn't have to pay
hundreds of thousands of dollars or pounds all depending on where you live to go and do a degree.
You know a four year computer science degree is going to be out of date by the time you graduate now
because cloud is just moving so fast.
You know if you look at AWOS technology in 2012 and compare it to what you have in 2016 that is the
rate of change.
And by the time you start your computer science degree and by the time you finish it a lot of it is
out of date you know.
And that's not a knock at a computer science degree.
I'm sure they all still have their you know their place but the way in which we are doing education
has to change.
You know we have to make education a lot more affordable.
We have to have these micro courses that are constantly updated as and when you know AWOS release new
technologies.
So anyway let's move on to the rest of this lecture.
So let's talk about the different design principles so we've got transparently attribute expenditure
and this is basically with the cloud makes it easy to identify the costs of a system and attribute I.T.
costs to individual business owners or individual business units.
And this helps identify return of investment and consequently gives those earnings and incentive to
optimize their resources and reduce costs.
So by transparently attributing expenditure you're really you know you're saying that this expense was
it was consumed by the nature of Hultman for example.
Well this is what marketing has spent on hosting and you can really drive those costs into individual
cost centers and then encourage those business units to lower those costs.
The next one is to use managed services to reduce the cost of ownership.
So in the cloud managed services remove the operational burden of maintaining servers Fatah such as
sending email or managing databases et cetera.
And because of those managed services operate at a cloud so they can actually lower the cost per transaction
or service.
So the next one is to trade capital expense of operating expense and basically instead of going out
and buying or investing heavily in a whole bunch of kit.
Basically you can go and pay for computing resources you consume as and when you can soon consume them.
For example development and test environments are typically only use for eight hours a day during the
working week.
So you can stop these resources when they're not in use and you can have a potential cost saving up
to 75 percent which is basically 40 hours versus 168 hours.
The next one is to benefit from economies of scale.
So by using cloud computing you can achieve a lower variable cost than you could have done it on your
own.
And because AWOS can achieve economies of scale so AWOS go out and buy servers.
They're not buying them by the fives tens or even hundreds.
They're buying them by the thousands or tens of thousands and they're actually probably just producing
their own as well.
So by you know you can benefit from Amazon's scale economies of scale by consuming their resources.
And then finally to stop spending money on data center operations AWOS does the heavy listing of recking
and stacking and powering servers so you can focus on your customers and business projects rather than
having these huge structures rather than basically having to worry about managing a data center.
If you've ever worked for any large manage hosting providers or any kind of large I.T. operations where
they have their own data centers you know how much of an operational overhead that can actually bring.
So moving on to our definitions so cost optimization in the cloud is composed of four different areas.
So the first one is match supply and demand.
The second one is cost effective resources.
The third one is expenditure awareness and the fourth one is optimizing over time.
Are we going to cover each one of these in details now.
So let's start with our match supply and demand basically for this one you need to try to optimally
align supply with demand.
You don't want to own that provision or under provision.
Instead as demand grows.
So should your supply of compute resources.
And so the perfect example of this is always auto scaling.
So auto scaling will scale with your demand.
Similarly in a service context you can use services such as Lamda that only execute or respond when
I request or demand comes in.
So that's the great thing about our business model is that I only get a cost as and when you watch these
videos if you're not watching these videos it's not costing my business anything.
That's because we run on a service environment and you know that's a pretty amazing achievement.
And I think a lot of Web sites a lot of the major web applications out there are all going to go server
this in the future because that's you know it's such a huge cost advantage to only pay for service as
and when your customer actually consumes it as opposed to having to pay for fleets of AC to instances
that are on all the time.
Service is going to be really big in the I.T. space coming up in the next few years.
Services such as cloud watch can also help you keep track as to what your demand actually is.
So what questions should you be asking around match supply and demand.
Well how do you make sure your capacity matches but does not substantially exceed what you need and
how are you optimizing your use of AWOS services.
OK so moving on to cost the next area which is cost effective resources using the correct instance Time
can be key to cost savings.
For example you might have a reporting process that is running on a T-2 micro and it takes around seven
hours to complete.
Now that same process could be run run on an M4 to extra large in a matter of minutes.
The result is the same but the T2 micro is more expensive because it ran for longer.
So well architected system always used the most cost efficient resources to reach the end business goal.
So what kind of question should we be asking around cost effective resources will have you selected
the appropriate resource type to meet your cost targets.
Have you selected the appropriate pricing model to meet cost targets and other managed services such
as higher level services than Amazon E.S. to Amazon abs and as an S3 that you can use to improve your
return on investment.
Moving on to the third area which is expenditure awareness with clouds you no longer have to go out
and get quite some physical servers you know and trust me I've done.
I spent like three or four years of my life doing this where I have to go get quotes from multiple vendors
for all these different bits of hardware have to figure out when theyre going to be delivered when theyre
going to be installed whose project managing it.
When our delivery date is actually going to be to our end customer and working all these things back
and putting it into a financial model where we're making profit on it and it's just a nightmare.
And this is what I loved about 8 of us is that you can provision things within seconds.
But the problem is is that that brings its own issues and so many organizations have these different
teams with their own AWOS accounts so your dentist might have their own AWOS account your marketing
department might have their own AWOS account and you know these are all built onto the company credit
card and what can happen is your costs can run away with you.
You know marketing might have this huge marketing campaign and then they it ends but they forget to
turn off the AC two instances at the end of the campaign they forget to have a scaled down policy for
example.
So you need to be aware of what each team is spending.
And that's really crucial to a well architected system you really need to watch what your teams are
spending.
And there are a lot of third party services that able to track this.
And the way you you track it was by using tags.
So you use cost allocation tracks to track this and you can also have billing alerts so if you're going
over a certain amount of expenditure you get an alert with a car.
We have a billing for $500 so we you know we are starting to spend over $500 a month.
Will actually send out.
And yeah that really is the cost of our infrastructure.
Again that's why I'm calling on service is fantastic.
And then you've also got consolidated billing as well so if you do have multiple tains with multiple
AWOS accounts you can wrap this all up into a consolidated bills.
You can see which AWOS accounts are spending what amount of money.
OK so what expenditure awareness questions should you be asking well what access controls and procedures
do you have in place to govern your AWOS costs.
How are you monitoring usage and spending and then how do you decommission resources that you no longer
need will stop resources that are temporarily not needed and then gave that example
and they gave that example of you know where you've got your test and dev environments that really should
only run from 9 to 5.
You should really be turned off when you go home at night.
And then finally how do you consider data transferred charges when designing your architecture.
OK so the final one is optimizing over time.
And this is again one of my sort of favorites.
This is what is most challenging about a cloud.
But is also what I think is a really a strong use case for our business.
AWOS moves fast.
It is constantly innovating its constantly updating their products and releasing new services.
So there are hundreds of new services.
Think last year is around 800 or 900.
I never actually got the final number but it was a huge number of new services in 2015 and is going
to be potentially a thousand use services this year.
A service that you chose yesterday may not be the best service to be using today.
You know for example just because you installed my siku.
Yes.
And that was the best technology that was available in say 2012 when Arroyo's launched at reinvent 2014
and came out a preview.
That might be a better fit for your business simply because of its performance and its redundancy.
So you need to be able to keep track of the changes made to AWOS and constantly reevaluate your existing
architecture.
And theres a couple of ways you can do this.
You can do this by subscribing to the AWOS blog and you can actually go to the AWOS blog and configure
it so that as and when they publish a new blog it automatically emails you you know a copy of that updates
so they update it basically every week and it's great to just have a read through of all the different
changes that they are making.
And then the next one is you can use services such as a trusted adviser to advise you you know where
you could be optimizing your environment over time.
OK so what questions should we be asking around optimizing over time.
Well theres only one question and thats how do you manage and consider the adoption of new services.
Okay so what key AWOS services did these four areas cover so with match supply and demand.
We're really talking about auto scaling with cost effective resources we're talking about Easy to and
really around reserved instances there as well as AWOS trusted advisor with expenditure awareness we're
talking about cloud watch alarms as well as S and S and with optimizing over time we're talking about
the AWOS block and then the AWOS trusted advisor service now with expenditure awareness in the actual
white paper where it talks about the key AWOS services it does directly say Kawachi alarms in S and
S but then previously in the pipe it was talking about you know consolidated billing it was talking
about creating billing alerts etc..
So just be aware of that.
Definitely make sure you have a read of the white paper yourself after you finish watching this section
of the course.
So one of my exam tips well in the cost optimization Pila you just have to remember the four areas match
supply and demand cost effective resources expenditure awareness and optimizing overtime.
And then if we look at the different questions so with match supply and demand we had.
How do you make sure your capacity matches but does not substantially exceed what you need.
How are you optimizing your usage of AWOS services under the cost effective resources area we had.
Have you selected the appropriate resource type to meet our cost targets and have you selected the appropriate
pricing model to meet cost targets.
And then finally other managed services or high level services than MSNBC to Amazon and Amazon S3 that
you can use to improve your return on investment.
Moving on to the third area with expenditure awareness or what access controls and procedures do you
have in place to govern your AWOS costs.
How are you monitoring your usage and spending how do you decommission resources that you no longer
need or stop resources that are temporarily not needed.
And then how do you consider data transfer charges when designing your architecture.
And then finally optimizing over time how do you manage and or consider the adoption of new services.
Okay guys that's it for this section.
I'm just going to do a summary lecture to finish this section up.
Okay so if you have any questions please let me know if not feel free to move on to the last lecture.
Thank you.