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Netflix's 5 Secrets For Maximizing Amazon Cloud Value

Netflix chief cloud architect Adrian Cockcroft shares five money-saving maneuvers for big Amazon Web Services users.

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Netflix wants "50% of its operations in one region and 50% in another," with one region serving as the fail-over site for the other, said Cockcroft. That way, neither a hurricane in the East nor an earthquake in the West would close down its business.

It plans to have a reservoir of reserved instance capacity, the type of virtual server for which the customer pays upfront and gets guaranteed access when it's needed, in each region so that it can invoke that capacity and continue full operation. Netflix may not use the reserved instances much of the time, but if disaster strikes, that capacity "will be yanked out from under someone else" and given to Netflix. That's possible because AWS sells spot instances that go for substantially under-market prices until a pre-paid customer like Netflix needs them.

3. Use Reserved Instances Appropriately.

Cockcroft advised other major AWS users to determine which workloads tend to operate at a steady state and then identify what that state is. By identifying steady-state workloads, customers know how much of a reserved instance they should buy and can move workloads onto the lower-cost server type to gain significant savings. "If you're going to run your job less than 3.5 months a year, then stick with an on-demand instance," he advised. Because reserved instance users make an upfront payment as well as pay an hourly rate for a minimum one-year contract, it doesn't pay to seek the lower rate unless the job runs for more than three and a half months.

4. Borrow Idle Capacity For Dev And Test.

Cockcroft said Netflix is trying to get away from having a separate set of AWS on-demand accounts for development and testing and will try to use idle reserve instance capacity for dev and test. That way, Netflix's surplus reserved instance capacity is getting some use while still being available for peaks in production workloads or disaster recovery. Such a move keeps the capacity Netflix needs available in the cloud, while putting it to a secondary use when it's not actually employed in everyday processing. That is, reserved instances can serve both a primary and secondary purpose, cutting your cloud bill. "I'm not sure other customers have figured this out," Cockcroft noted.

5. Consolidate Accounts To Gain Discounts.

Cockcroft urged Cloud Connect attendees to consolidate their AWS bill under their company's name, instead of having many individuals and departments run their own accounts. No percentages were cited, but Amazon will discount services for larger users, but it won't discount them if they exist as many independent accounts. "Every business has more than one application and more than one cloud account," pointed out Varia. A customer qualifies for a lower-priced billing tier when the accounts are consolidated.

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User Rank: Author
4/9/2013 | 6:26:05 PM
re: Netflix's 5 Secrets For Maximizing Amazon Cloud Value
The consolidation comment brings up an interesting point. Many IT chiefs have rogue Amazon instances out there, set up by developers or even folks on the business side, that they don't know about. You have to track them down before you can consolidate.

Laurianne McLaughlin
User Rank: Apprentice
4/11/2013 | 12:12:21 AM
re: Netflix's 5 Secrets For Maximizing Amazon Cloud Value
The full slide deck is available here:

Most of the discussion and slides was actually by Jinesh, so many of the quotes in this article are of things that Jinesh said, rather than what I said.

The discussion of Brazil overstates what we did. We ran a small experiment in AWS Brazil for a week or two earlier this year, it wasn't a large scale deployment. The point was that we could easily try out deploying systems anywhere in the world.

Point 4 and 5 above doesn't quite have it right. With consolidated billing, reservations apply across accounts. It makes sense to have excess reservations in production accounts so that you have a capacity guarantee for handling production peaks. The excess is mopped up by other accounts at the end of the month, so that there is no cost penalty for the extra headroom. The other optimization is to autoscale down the production web services instances during the night, and use the same reserved instances to create short lived hadoop clusters to do the daily ETL processing for business intelligence metrics.
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