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Two potentially lower cost options are either AWS Reserved Instances or AWS
Spot Instances. Which would you recommend?
Answer
AWS Reserved Instances charge a fixed annual rate plus an hourly per-use rate.
In 2011, the annual cost for the High-CPU Extra Large Instance is $1820 and the
hourly rate is $0.24. Since we pay for the instances whether they are used or not,
let's assume that the average utilization of Reserved Instances is 80%. Then the
average price per hour becomes:
Thus, the savings using Reserved Instances would be roughly 17% or $23M for
the 2009 MapReduce workload.
Sampling a few days in January 2011, the hourly cost of a High-CPU Extra
Large Spot Instance averages $0.235. Since that is the minimum price to bid
to get one server, that cannot be the average cost since you usually want to
run tasks to completion without being bumped. Let's assume you need to pay
double the minimum price to run large MapReduce jobs to completion. The
cost savings for Spot Instances for the 2009 workload would be roughly 31% or
$41M.
Thus, you tentatively recommend Spot Instances to your boss since there is
less of an up-front commitment and they may potentially save more money.
However, you tell your boss you need to try to run MapReduce jobs on Spot In-
stances to see what you actually end up paying to ensure that jobs run to com-
pletion and that there really are hundreds of High-CPU Extra Large Instances
available to run these jobs daily.
In addition to the low cost and a pay-for-use model of utility computing, another strong at-
tractor for cloud computing users is that the cloud computing providers take on the risks of
over-provisioning or under-provisioning. Risk avoidance is a godsend for startup companies,
as either mistake could be fatal. If too much of the precious investment is spent on servers be-
fore the product is ready for heavy use, the company could run out of money. If the service
suddenly became popular, but there weren't enough servers to match the demand, the com-
pany could make a very bad impression with the potential new customers it desperately needs
to grow.
The poster child for this scenario is FarmVille from Zynga, a social networking game on
Facebook. Before FarmVille was announced, the largest social game was about 5 million daily
players. FarmVille had 1 million players 4 days after launch and 10 million players after 60
days. After 270 days, it had 28 million daily players and 75 million monthly players. Because
they were deployed on AWS, they were able to grow seamlessly with the number of users.
Moreover, it sheds load based on customer demand.
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