Calculating How Much Amazon Costs

January 30, 2014

Amazon Web Services are a good way to store code and other data, but it can get a little pricey. Before you upload your stuff to the Amazon cloud, check out Heap’s article, “How We Estimated Our AWS Costs Before Shipping Any Code.” Heap is an iOS and Web analytics tool that captures every user interaction. The Heap team decided to build it, because there was not a product that offered ad-hoc analysis or analyzed an entire user’s activity. Before they started working on the project, the team needed to estimate their AWS costs to decide if the idea was a sustainable business model.

They needed to figure how much data was generated by a single user interaction, but then they had to find out where the data was stored and what to store it on. The calculations showed that for the business model to work a single visit would have to yield an average one-third of a cent to be worthwhile for clients.

CPU cores, compression, and reserve instances reduced costs, but there are some unexpected factors that inflated costs:

1. AWS Bundling. By design, no single instance type on AWS strictly dominates another. For example, if you decide to optimize for cost of memory, you may initially choose cr1.8xlarge instances (with 244GB of RAM). But you’ll soon find yourself outstripping its paltry storage (240 GB of SSD), in which case you’ll need to switch to hs1.8xlarge instances, which offer more disk space but at a less favorable cost/memory ratio. This makes it difficult to squeeze savings out of our AWS setup.

2. Data Redundancy. This is a necessary feature of any fault-tolerant, highly available cluster. Each live data point needs to be duplicated, which increases costs across the board by 2x.”

Heap’s formula is an easy and intuitive way to calculate pricing for Amazon Cloud Services. Can it be applied to other cloud services?

Whitney Grace, January 30, 2014

Sponsored by ArnoldIT.com, developer of Augmentext

Future Looks Bright for Amazon Web Services

December 11, 2013

It seems Amazon has sprinkled fairy dust on its inability to control costs. ReadWrite informs us, “Amazon Web Services Worth $50 Billion by 2015, and That May Be Too Low.” Writer Matt Asay notes that while other cloud services bring in higher revenue multiples than AWS, Amazon’s strength lies in its long-term strategies.

He writes:

“AWS would almost certainly get a more bubble-esque valuation multiple if it operated more profitably. But as Amazon has done in retail, it generally favors pricing that gives it slim profits but a fat market share. It is pricing for future domination, in other words. So far this approach has ensured rapidly growing revenues, as Macquarie Capital estimates suggest.”

See the article for a graph of those Macquarie estimates. Asay points out that many have rejected the idea that AWS could be wildly profitable, saying that no one would take the service seriously.

The article clarifies:

“That is, serious enterprises would never trust important workloads to Amazon’s Infrastructure-as-a-Service offering, leaving AWS to scrape nickels and dimes off the floor. And yet, if anything, AWS has surpassed expectations, and has demonstrated an ever-increasing relevance for serious enterprise workloads.”

Why? Asay chalks it up to the developers. He points to the growing trend toward cooperation between development and operations departments, which our truncation-loving culture has dubbed DevOps. Amazon is apparently very good at this synthesis, and affording more respect to developers is translating into profits.

Hmm. Perhaps the company can improve its lot even more by extending this respectful attitude to its warehouse workers. Just a suggestion.

Cynthia Murrell, December 11, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

HP Calls out AWS as Outdated

October 17, 2013

In an interesting twist, tech veteran Hewlett Packard calls out competitor Amazon for being too old-fashioned. Gigaom reports, “Beware of Amazon’s ‘Legacy’ Cloud, Says HP’s Cloud Guru.” We’d like to start with a curious observation—the proclamation contains nary a word about the advantages HP Autonomy offers over Amazon’s CloudSearch, still in beta. We’d think they would want to emphasize that advantage.

The focus of this PR push, though, is the rise of OpenStack, the growing open-source alternative to AWS. HP has contributed much to this project, apparently banking on the sale of related support and services. Writer Barb Darrow informs us:

“HP is hoping that the open-source fervor that propelled Linux to the top of the heap in enterprise and mobile operating systems will similarly motivate enterprise customers to take the OpenStack cloud plunge — with full HP services and support attached, of course.

“Given the sheer number of contributors to OpenStack — HP claims the fourth most contributions to the latest Havana release — it’s clear that the technology has piqued interest among developers and their employers. But since it launched four years ago, it’s still new in the game and businesses weighing a move into cloud need to know that moving legacy stuff to any cloud isn’t a day at the beach. HP, he said, will help assess those difficulties up front and, if needed, help with the move.”

Of course they will; that’s rather the point, isn’t it? Darrow notes that the popularity of OpenStack is fed by the shift toward the hybrid cloud. In this model, businesses can keep their most sensitive data on “private clouds” set up within a company’s own firewall. They can then share selected information in the public cloud for collaboration. The shift from one to the other, however, isn’t always as smooth as desired. This is where HP hopes to fill a niche it is helping to build.

Darrow refuses to dismiss the prospects of AWS. The platform has performed well since its launch eight years ago, rolling out new services at an impressive clip. Amazon must know potential clients are eyeing the hybrid cloud model. Should we expect a hybrid option from AWS soon?

Cynthia Murrell, October 17, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

AWS Architect Defends AWS Turf

October 10, 2013

Now that the concept of the cloud has caught on, the folks at Amazon Web Services are not taking competition lying down. The Register reports, “Oh Snap—AWS Daddy Disses It’s ‘Old Guard’: You’re so 2000-and-Late.” To unpack that title: The “AWS Daddy” is Andy Jassy, the architect of AWS and a current Amazon VP. The “old guard,” though unnamed by Jassy, must refer to Oracle, HP, Dell, and Microsoft, all of which are now offering cloudy services. And that reference to a Black Eyed Peas lyric? It points to one of Jassy’s swipes at those companies—he insists that their current solutions are at a point AWS reached five years ago. Writer Gavin Clarke dishes:

“AWS and Amazon infrastructure senior vice president Jassy on Tuesday said he reckoned traditional on-premises tech companies were wrong to claim their private clouds offered the same benefits as AWS. Speaking at the AWS Enterprise Summit in London, Jassy did not name names, but referred obliquely to on-premises providers that charge large licenses [and] make fat margins. Running your own cloud does not give you the cost savings of having Amazon’s servers process and store your data and apps or give you access to a stream of new features, he argued.”

Perhaps, though Jassy does not seem to offer any data to support his assertions; see the article for more of his criticisms. I do agree that the pricey, large-license business model prevalent at these more established companies may be growing obsolete. Perhaps, though, their willingness to change by embracing cloud technology signals a more general disposition to adapt. After all, these companies have weathered market shifts before; let’s give them some credit now. Businesses considering their cloud options should do their own research into the choices, not simply accept Jassys’ avowal that his company’s solution is the only competent game in town.

Cynthia Murrell, October 10, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

Infographics Take on New Analytic Importance

August 21, 2013

We are increasingly living in a big data and analytic society. But when discussing all this information, it’s hard to put a visual with it. Humans are, after all, very sight-oriented. However, that problem is quickly looking like a thing of the past after discovering a recent Make Use Of article, “Create Your Own Infographic about Your Facebook, Twitter and Youtube Use.”

According to the story:

What About Me is a free to use web service that lets you easily analyze how you have been using your Facebook, Twitter, and YouTube accounts. You start by granting the site access to your accounts. Your usage is analyzed and the infographic is generated while you play with some distractingly interactive circles that are displayed.

The infographic that is finally generated shows your interests in terms of percentages, how you react with friends, plus a number of other interesting things about your social networking usage.

This really is the next logical step in infographics. We’ve been lured, as Wired astutely pointed out, by infographics as “link bait” for a long time. It’s time we turned that gaze inward to see what our social habits say about us. This will take off, we predict.

Patrick Roland, August 21, 2013

Sponsored by ArnoldIT.com, developer of Beyond Search

Raritan User Interface on Amazon Web Services

August 19, 2013

Raritan Technologies has announced a partnership with Amazon Web Services to launch a dynamic search user interface on the popular cloud platform. PR Newswire covers all the details in their article, “Raritan Releases Dynamic Search User Interface on Amazon Web Services (AWS) Marketplace.”

The article begins:

“Raritan Technologies announced a new relationship with Amazon Web Services to expand its search solutions through the CloudSearch Plus User Interface (UI). This search solution, which interacts with Amazon’s CloudSearch product, is now for sale on the AWS Marketplace.  Raritan’s search UI is easily configured to access any CloudSearch collection, customizable for each company’s unique interface requirements and enables mobility for content retrieval and accessibility.”

Raritan is a partner with many open source solution providers, including LucidWorks. LucidWorks is known for their expertise in Apache Lucene Solr, and for their award winning customer support and training. Raritan will benefit from the partnership with LucidWorks, as well as other open source providers with a broad spectrum of expert areas. Open source is definitely an unstoppable force in enterprise, and partnerships like these are just one reason why the commercial search solutions should be afraid.

Emily Rae Aldridge, August 19, 2013

Sponsored by ArnoldIT.com, developer of Beyond Search

Google Ready to Vie with Amazon Web Services

June 30, 2013

We thought Amazon was looking at Google’s technical presentations and papers, then moving more quickly along paths on which Google was dallying. Now ZDNet informs us that the search giant is stepping up in, “Google Sets Up to Challenge Amazon Web Services.” The article reports:

“Google’s move to make its Compute Engine generally available sets up an duel with Amazon Web Services. Keep in mind that Google is playing catch up, but a recent set of moves should make things interesting.

“On Wednesday, Google took the wraps off the Google Compute Engine. It also moved to support PHP, a popular programming language, with Google App Engine. At Google IO 2013, the search giant had a key track for its cloud platform. Engineers talked persistent disk, redundancy, scaling, storage and pitched developers on spinning up an instance for less than 2 cents an hour.

“Presentations at Google IO included benchmarks showing better performance of Google Cloud Engine relative to ‘an unnamed competitor,’ which was obviously AWS.”

See the article for specifics, but the list of advantages shows Google can pose a strong challenge to AWS. Writer Larry Dignan notes that Google has the engineering experience, infrastructure, credibility, and finances to pursue a “cloud pricing race to the bottom.” Still, it is up to them to show customers why they should make the switch; support, established partnerships, and longevity are on Amazon’s side here. We shall see what happens as the competition continues.

Cynthia Murrell, June 30, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

AWS Global Start Up Challenge is Back

October 25, 2012

Amazon’s clever angle on finding good people and good ideas is back, the company declares in its post, “Welcome to the 6th AWS Global Start-Up Challenge.” The annual contest, which began in 2007, provides publicity while delivering a bevy of talent and insights to the company.

The Challenge calls on start-ups that have built their businesses using Amazon Web Services to submit their ideas for a “product, Web site, software application/tool, service, or any other system that substantively uses” one of Amazon’s cloudy products. (The full list of those products is listed in the Official Rules.) The announcement states:

“This contest, launched in 2007, is a way for promising start-ups to get noticed and compete for an opportunity to win some great rewards for your start-up. This year’s challenge offers prizes such as $100K in combined cash and credits for multiple winners, VC introductions, PR support, and more. If your start-up is built using AWS, we want you to apply!”

The write up goes on to give some specifics on the rewards Amazon will shower upon the winning contestant. You can see the entire list here, but opportunity and publicity are perhaps the most promising. The announcement mentions:

Meet Tier One Investors: At last year’s event, finalists met 1:1 with representatives from top VCs such as Andreessen Horowitz, Union Square Ventures, NEA, Accel and Madrona Venture Group. Last year’s winner Fantasy Shopper went on to raise $3.3M from top tier venture firms NEA and Accel after the Challenge.

“Press and attention for your start-up: Finalists and Semi-Finalists will be featured in Start-Up Challenge press releases which have previously been picked up by top tech outlets such as TechCrunch and GigaOM.”

So, there you have it. If you are part of a qualifying start-up and are up for the challenge, you’d better get cracking. The deadline for entries is November ninth.

Cynthia Murrell, October 25, 2012

Sponsored by ArnoldIT.com, developer of Augmentext