AcademyCloudFoundations Module 02

Module 2: Cloud Economics and Billing
AWS Academy Cloud Foundations
© 2022, Amazon Web Services, Inc. or its affiliates. All rights reserved.
Module overview
Topics Activities
• Fundamentals of pricing • AWS Pricing Calculator
• Total Cost of Ownership • Support plans scavenger hunt
• AWS Organizations
• AWS Billing and Cost Management
• Technical Support
Demo
• Overview of the Billing Dashboard
Knowledge check
© 2022, Amazon Web Services, Inc. or its affiliates. All rights reserved. 2
Module objectives
After completing this module, you should be able to:
• Explain the AWS pricing philosophy
• Recognize fundamental pricing characteristics
• Indicate the elements of total cost of ownership
• Discuss the results of the AWS Pricing Calculator
• Identify how to set up an organizational structure that simplifies billing and account
visibility to review cost data.
• Identify the functionality in the AWS Billing Dashboard
• Describe how to use AWS Bills, AWS Cost Explorer, AWS Budgets, and AWS Cost and
Usage Reports
• Identify the various AWS technical support plans and features
Section 1: Fundamentals of pricing
AWS pricing model
Three fundamental drivers of cost with AWS
Compute Storage Data transfer

• Charged per hour/second* • Charged typically per GB • Outbound is aggregated and
charged
• Varies by instance type
• Inbound has no charge (with
some exceptions)
*Linux only • Charged typically per GB
How do you pay for AWS?
Pay for what you use Pay less when you reserve Pay less when you use
more and as AWS grows
Pay for what you use
Pay only for the services that you consume, with no large
upfront expenses.
On premises AWS
Pay less when you reserve
Invest in Reserved
Instances (RIs):
• Save up to 75 percent
• Options: EC2
instance
• All Upfront Reserved
Instance (AURI)  largest
discount On NURI PURI AURI
• Demand
Partial Upfront Reserved
Instance (PURI)  lower
discounts
• No Upfront Payments
Reserved Instance (NURI)
 smaller discount
Pay less by using more
Realize volume-based discounts:
• Savings as usage increases.
• Tiered pricing for services like Amazon
Simple Storage Service (Amazon S3),
Amazon Elastic Block Store (Amazon EBS),
or Amazon Elastic File System (Amazon
EFS)  the more you use, the less you pay
per GB.
• Multiple storage services deliver lower
storage costs based on needs.
Pay even less as AWS grows
As AWS grows:
• AWS focuses on lowering cost of doing business.

• This practice results in AWS passing savings from economies
of scale to you.
• Since 2006, AWS has lowered pricing 75 times (as of
September 2019).
• Future higher-performing resources replace current resources
for no extra charge.
Custom pricing
• Meet varying needs through custom pricing.

• Available for high-volume projects with unique
requirements.
AWS Free Tier
Enables you to gain free hands-on experience with the AWS platform,
products, and services. Free for 1 year for new customers.
Sign up for an Learn with 10- Start building

AWS account minute tutorials with AWS
Services with no charge
Amazon VPC
Elastic Beanstalk**
Auto Scaling**
AWS CloudFormation**
**Note: There might be

AWS Identity and Access charges associated with other
Management (IAM) AWS services that are used
with these services.
Key takeaways • There is no charge (with some exceptions) for:
• Inbound data transfer.
• Data transfer between services within the same AWS
Region.
• Pay for what you use.
• Start and stop anytime.
• No long-term contracts are required.
• Some services are free, but the other AWS
services that they provision might not be free.
Section 2: Total Cost of Ownership
On-premises versus cloud
Traditional Infrastructure AWS Cloud
≠
No upfront expense Improve time to
Equipment Resources and
—pay for what you market and agility
administration
use
Scale up Self-service
Contracts Cost and down
infrastructure
What is Total Cost of Ownership (TCO)?
Total Cost of Ownership (TCO) is the financial
estimate to help identify direct and indirect costs of a
system.
Why use TCO?

• To compare the costs of running an entire
infrastructure environment or specific workload
on-premises versus on AWS
• To budget and build the business case for moving
to the cloud
TCO considerations
Hardware: Server, rack chassis Facilities cost

Software: Operating system
power distribution units (PDUs),
1 Server Costs top-of-rack (TOR) switches (and
(OS), virtualization licenses
(and maintenance) Space Power Cooling
maintenance)
Hardware: Storage disks, storage Facilities cost

2 Storage Costs area network (SAN) or Fibre Storage administration costs
Channel (FC) switches Space Power Cooling
Network hardware: Local area Facilities cost

3 Network Costs network (LAN) switches, load Network administration costs
balancer bandwidth costs Space Power Cooling
4 IT Labor Costs Server administration costs
On-premises versus all-in-cloud
You could save up to 96 percent a year by moving your infrastructure to AWS.
Your 3-year total savings would be $159,913.
Server Storage Network IT-Labor Total
400000
350000
300000
250000
200000
150000
100000
50000
AWS cost includes business-level support and
a 3-year PURI EC2 instance 0
On-Premises AWS
AWS Pricing Calculator
Use the AWS Pricing Calculator to:

• Estimate monthly costs
• Identify opportunities to reduce monthly
costs
• Model your solutions before building them
• Explore price points and calculations
behind your estimate
• Find the available instance types and
contract terms that meet your needs Access the AWS Pricing Calculator
• Name your estimate and create and name
groups of services
Reading an estimate
Your estimate is broken into: first 12 months total, total upfront, and total monthly.
First 12 months total Total upfront Total monthly
Activity: AWS Pricing Calculator activity
• Break up into groups of four or five and use the AWS Pricing Calculator and
specifications provided to develop a cost estimate.
• Be prepared to report your findings back to the class.
AWS Pricing calculator website
Additional benefit considerations
Hard benefits Soft Benefits
• Reduced spending on compute, • Reuse of service and applications that
storage, networking, security enable you to define (and redefine
solutions) by using the same cloud
• Reductions in hardware and software service
purchases (capex)
• Increased developer productivity
• Reductions in operational costs,
• Improved customer satisfaction
backup, and disaster recovery
• Agile business processes that can quickly
• Reduction in operations personnel
respond to new and emerging
opportunities
• Increase in global reach
Case study: Total Cost Of Ownership (1 of 6)
Background: • Growing global company with over 200 locations

• 500 million customers, $3 billion annual revenue
Case study: Total Cost of Ownership (2 of 6)

Challenge: • Meet demand to rapidly deploy new solutions

• Constantly upgrade aging equipment


Criteria: • Broad solution to handle all workloads

• Ability to modify processes to improve efficiency and lower costs
• Eliminate busy work (such as patching software)
• Achieve a positive return on investment (ROI)
Background: • Is a growing global company with over 200 locations

• Have 500 million customers, $3 billion (USD) annual revenue

Criteria: • Have a broad solution to handle all workloads

• Be able to modify processes to improve efficiency and lower costs
• Eliminate busy work (such as patching software)
• Achieve a positive return on investment (ROI)
Solution: • Moved their on-premises data center to AWS

• Eliminated 205 servers (90 percent)
• Moved nearly all applications to AWS
• Used 3-year Amazon EC2 Reserved Instances
Business Goals:
Growth
Enhanced 24/7 business
Results: Operational efficiency
Resource Speed to market Operational

optimization • One day to provision new efficiency
• Robust security businesses • Continuous cost
compliance • Just minutes to push out a optimization and
service reduction
• Enhanced disaster
recovery
• Increased computing
capacity
Section 3: AWS Organizations
Introduction to AWS Organizations
AWS Organizations
AWS Organizations terminology
*Organizational Units (OUs)

Key features and benefits
Policy-based account management
Group based account management
Application programming interfaces (APIs)

AWS
Organizations
that automate account management
Consolidated billing
Security with AWS Organizations
Service control policies

Control access with
IAM policies enable you (SCPs) enable you to
AWS Identity and
to allow or deny access allow or deny access to
Access Management
to AWS services for AWS services for
(IAM).
users, groups, and roles. individuals or group
accounts in an
organizational unit (OU).
Organizations setup
Step 1 Step 2 Step 3 Step 4

Create Create Create Test
Organization organizational service restrictions
units control
policies
Limits of AWS Organizations
Accessing AWS Organizations
AWS Management Console
AWS Command Line

Interface (AWS CLI) tools
Software development kits
AWS (SDKs)
Organizations
HTTPS Query application

programming interfaces (API)
Section 4: AWS Billing and Cost
Management
Introducing AWS Billing and Cost Management
AWS Billing Dashboard
Tools
AWS Budgets AWS Cost and Usage Report AWS Cost Explorer
Monthly bills
Cost Explorer
Forecast and track costs
Cost and usage reporting
Recorded demo:
Amazon Billing
dashboard
Amazon Billing
dashboard demo
Billing dashboard demonstration
Section 5: Technical support
AWS support (1 of 2)
• Provide unique combination of tools and expertise:
• AWS Support
• AWS Support Plans
• Support is provided for:
• Experimenting with AWS
• Production use of AWS
• Business-critical use of AWS
AWS support (2 of 2)
• Proactive guidance :
• Technical Account Manager (TAM)
• Best practices :
• AWS Trusted Advisor
• Account assistance :
• AWS Support Concierge
Support plans
AWS Support offers four support plans:
• Basic Support – Resource Center access, Service
Health Dashboard, product FAQs, discussion forums,
and support for health checks
• Developer Support: Support for early development
on AWS
• Business Support: Customers that run production
workloads
• Enterprise Support: Customers that run business
and mission-critical workloads
Case severity and response times
Activity: Support plan scavenger hunt
• Break up into groups of four or five and develop a recommendation for the
best support plan for one of the business cases that are provided.
• Be prepared to report your findings back to the class.
Module wrap-up
Module summary
• Explored the fundamental of AWS pricing
• Reviewed TCO concepts
• Reviewed an AWS Pricing Calculator estimate
• Reviewed the Billing dashboard
• Reviewed Technical Support options and costs
Complete the knowledge check
Sample exam question
Which AWS service provides infrastructure security optimization recommendations?
Choice Response
A AWS Price List Application Programming Interface (API)
B Reserved Instances
C AWS Trusted Advisor
D Amazon Elastic Compute Cloud (Amazon EC2) Spot Fleet
Sample exam question answer
Which AWS service provides infrastructure security optimization recommendations?
The correct answer is C.

The keyword in the question is “recommendations”.
Additional resources
• AWS Economics Center: http://aws.amazon.com/economics/
• AWS Pricing Calculator: https://calculator.aws/#/
• Case studies and research: http://aws.amazon.com/economics/
• Additional pricing exercises: https://dx1572sre29wk.cloudfront.net/cost/
Thank you
All trademarks are the property of their owners.

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What are the three fundamental drivers of cost with AWS?

What are the three fundamental drivers of cost with AWS?

What are the three ways to pay less for AWS services?

What are the three ways to pay less for AWS services?

Module 2: Cloud Economics and Billing

AWS Academy Cloud Foundations

Compute Storage Data transfer

• AWS focuses on lowering cost of doing business.

• Meet varying needs through custom pricing.

Sign up for an Learn with 10- Start building

**Note: There might be

Traditional Infrastructure AWS Cloud

Why use TCO?

Hardware: Server, rack chassis Facilities cost

Hardware: Storage disks, storage Facilities cost

Network hardware: Local area Facilities cost

4 IT Labor Costs Server administration costs

Use the AWS Pricing Calculator to:

First 12 months total Total upfront Total monthly

AWS Pricing calculator website

Background: • Growing global company with over 200 locations

Background: • Growing global company with over 200 locations

Challenge: • Meet demand to rapidly deploy new solutions

Background: • Growing global company with over 200 locations

Challenge: • Meet demand to rapidly deploy new solutions

Criteria: • Broad solution to handle all workloads

Background: • Is a growing global company with over 200 locations

Challenge: • Meet demand to rapidly deploy new solutions

Criteria: • Have a broad solution to handle all workloads

Solution: • Moved their on-premises data center to AWS

Resource Speed to market Operational

*Organizational Units (OUs)

Policy-based account management

Group based account management

Application programming interfaces (APIs)

Service control policies

Step 1 Step 2 Step 3 Step 4

AWS Management Console

AWS Command Line

HTTPS Query application

• Be prepared to report your findings back to the class.

A AWS Price List Application Programming Interface (API)

C AWS Trusted Advisor

D Amazon Elastic Compute Cloud (Amazon EC2) Spot Fleet

The correct answer is C.

All trademarks are the property of their owners.

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