AWS Business Case

How to build a migration
business case and use AWS

in a cost-efficient way
Peter Shi
Cloud Financial Management BDM, AWS
© 2019, Amazon Web Services, Inc. or its affiliates. All rights reserved.
Agenda
The economics of cloud
Building your business case for the cloud
Using AWS in a cost-efficient way
Cloud is the new normal, with fewer organizations
asking “Why?” and more asking “How and how fast?”
Industrial Shift to on-demand

Revolution power
Cloud Shift to on-demand

Revolution computing
Customers are adopting the cloud at a rapid pace
Agility/Dev Data Center Innovation & Cost Reduction

Productivity Consolidation Digital
Transformation
Acquisitions Large scale compute Facility or Colocation or

or Divestitures intensive workloads Real Estate decisions outsourcing contract
changes
Cloud value framework
Cost Savings Staff Operational

(TCO) Productivity Resilience Business Agility
What is Infrastructure cost

savings/avoidance from
Efficiency improvement
by function on a task-
Benefit of improving
SLAs and reducing
Deploying new features/
applications faster and
it? moving to the cloud by-task basis unplanned outages reducing errors
Examples 30% reduction in

TCO (Globe)
Over 500 hours per year
of server configuration
Selected AWS for its
security posture
Migrated 30
applications in 50 days
time saved (Sage) (Capital One) (National Australia
Bank)
Typical Most Compelling

Focus Cloud Benefits
The economics of cloud illustrated
Infrastructure cost $
Key:
Predicted demand
Time
Large Key:
capital Predicted demand
expenditure
Traditional hardware
Time
Large Key:
expenditure
Actual demand
Time
Large Key:
expenditure
Opportunity Actual demand
cost
Time
Lost
Large opportunity Key:
expenditure
cost
Time
Lost
expenditure
cost
AWS
Time
Lost
expenditure
cost
AWS
Optimized AWS
Time
Business case topic examples
• The business problem or opportunity
• Expected benefits
• Risks
• Costs
• Timeframe and milestones
• Operations
• Risks
• Costs
• Operations
Operational resilience: Downtime costs
$1.2 to $500K
$474K
$2.5B to $1M
Annual Fortune Cost/hr. of a Average cost/hr.

1000 application critical of downtime
downtime costs application (Ponemon
(IDC) failure (IDC) Institute)
AWS benchmarking insights: Operational resilience
Operational resilience: example
# of users = 1,000
FTE = $100K p.a.
0.1% uptime improvement
60% of time working with other apps
Operational resilience: example
# of users = 1,000
FTE ($) = $100K p.a.
0.1% uptime improvement
60% of time working with other apps
$40K p.a.
Operational resilience: Quantifying cost
Cost Category % of Total Definition
The cost of contractors, consultants, auditors and other specialists engaged to
Third Parties 1.3%
help resolve unplanned outages.
Equipment 1.3% The cost of new equipment purchases and repairs, including refurbishment.
All after-the-fact incidental costs associated with business

Ex-post Activities 1.1%
disruption and recovery.
Activities and associated costs that relate to bringing the organization’s
Recovery 2.9%
networks and core systems back to a state of readiness.
Activities associated with the initial discovery and subsequent investigation
Detection 3.6%
of the partial or complete outage incident.
IT Productivity 8.4% The lost time and related expenses associated with IT personnel downtime.
End-user Productivity 18.7% The lost time and related expenses associated with end-user downtime.
The total revenue loss from customers and potential customers because of
Lost Revenue 28.2%
their inability to access core systems during the outage period.
Additional economic loss of the outage, including reputational damages,
Business disruption 34.6%
customer churn and lost business opportunities.
TOTAL 100.0%
• Risks
• Costs
• Operations
If comparing AWS cost to on-premises cost,
keep in mind factors beyond the raw-server cost
Hardware—Server, Rack Software—OS, Facilities Cost
1 Server Costs Chassis PDUs, ToR Switches
(+Maintenance)
Virtualization Licenses
(+Maintenance) Space Power Cooling
Facilities Cost
2 Storage Costs Hardware—Storage Disks,
SAN/FC Switches
Storage Software Costs
(+Maintenance) Space Power Cooling
Facilities Cost
Network Hardware—LAN
3 Network Costs Switches, Load Balancer
Recurring ISP / Bandwidth
Costs Space Power Cooling
Server Admin, Virtualization Admin, Storage Admin, Network Admin, Support Team, Facilities
4 IT Labor Costs Operations, Maintenance and Upgrades, Security and Compliance (e.g., PCI DSS compliant)
AWS benchmarking insights: Cost savings
AWS can help you estimate costs
• Pricing smaller environments: Public pricing web pages
• Comparing AWS to on-premises (high-level):

AWS Total Cost of Ownership (TCO) Calculator
• Most frequently used pricing tool: AWS Simple Monthly Calculator
• New pricing tool: AWS Pricing Calculator
TSO Logic quickly delivers an optimized cost estimate for AWS
It enables business and IT leaders to:

Determine the most cost-effective path to cloud
Maximize Microsoft licenses for even bigger savings
• Risks
• Costs
• Operations
Consume AWS infrastructure like SaaS with
AWS Managed Services (AMS)
Production-ready virtual private cloud, landing zone, and operating model
Application DevOps
Customer/
Partner
Applications
Automated infra ops, security, compliance, and governance
AMS
Curated AWS
Curated AWS services
management tools
National Australia Bank migrated
30 apps in 50 days with AMS
In 50 days we:
• Built 6 Landing Zones
• Migrated 30 applications
• Maintained security and
compliance standards
AMS subsequently optimized
spend for NAB, saving 22%
• Risks
• Costs
• Operations
Cost optimization journey of a compute workload
Starting workload 100% of initial cost
Use open-source operating system 80%
Rightsize down 1 size 40%
Non-prod.
Turn off outside
12%
of work hours
Non-prod.
Turn off outside
12%
of work hours
Amazon EC2 Spot 3%
Non-prod. Production A
Turn off outside
12% 1yr. RIs 27%
of work hours
Amazon EC2 Spot 3%
Non-prod. Production A Production B

Turn off outside Auto
12% 1yr. RIs 27% 20%
of work hours Scaling
Amazon EC2 Amazon EC2
3% 5%
Spot Spot
Start by understanding where the low-hanging fruit is in your case
Impact
Rightsizing
pre-migration
Deleting idle
resources
S3 intelligent
tiering
Complexity
Impact
Scheduling
Rightsizing Reserved
pre-migration Instances
Deleting idle
resources
S3 intelligent
tiering
Complexity
Impact
Scheduling
Rightsizing Reserved
pre-migration Instances
Deleting idle
resources Rightsizing
production
S3 intelligent
tiering
Complexity
Start by understand where the low-hanging fruit is in your case
Impact Spot, Serverless,

Scheduling Amazon EC2 Auto Scaling,
and other cost-aware
Rightsizing Reserved architecture*
*Typically needs upfront design investment
pre-migration Instances or management support if done reactively
Deleting idle
resources Rightsizing
production
S3 intelligent
tiering
Complexity
Use AWS Cost Explorer to see costs more often than
once a month. AWS Budgets can give customizable
warnings.
Monthly AWS Cost Explorer

invoice and AWS Budgets
In Console: AWS Well-Architected Tool
Asks you best-practice cost-aware architecture questions at the
workload level. Great for training/learning to architect for cost.
Use AWS Cost Labs prescriptive guidance on how to
manage spend from basic to advanced tutorials
http://awscostlabs.com
The AWS Cost Management Blog shares relevant
news and updates and contains basic tutorials
https://aws.amazon.com/blogs/aws-cost-management/
Learn from AWS experts. Advance your skills and
knowledge. Build your future in the AWS Cloud.
Digital Training Classroom Training AWS Certification

Free, self-paced online Classes taught by accredited Exams to validate expertise
courses built by AWS AWS instructors with an industry-recognized
experts credential
Ready to begin building your cloud skills?
Get started at: https://www.aws.training/
© 2019, Amazon Web Services, Inc. or its Affiliates. All rights reserved.
Why work with an APN Partner?
APN Partners are uniquely positioned APN Partners with deep expertise in
to help your organization at any AWS services:
stage of your cloud adoption journey, AWS Managed Service Provider (MSP)
and they:
Partners
• Share your goals—focused on your APN Partners with cloud infrastructure and
success application migration expertise
• Help you take full advantage of all the AWS Competency Partners
business benefits that AWS has to offer APN Partners with verified, vetted, and validated
specialized offerings
• Provide services and solutions to
support any AWS use case across your AWS Service Delivery Partners
full customer life cycle APN Partners with a track record of delivering
specific AWS services to customers
Find the right APN Partner for your needs: https://aws.amazon.com/partners/find/

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How to build a migration

business case and use AWS

The economics of cloud

Building your business case for the cloud

Using AWS in a cost-efficient way

Industrial Shift to on-demand

Cloud Shift to on-demand

Agility/Dev Data Center Innovation & Cost Reduction

Acquisitions Large scale compute Facility or Colocation or

Cost Savings Staff Operational

What is Infrastructure cost

Examples 30% reduction in

Typical Most Compelling

• The business problem or opportunity

• Timeframe and milestones

• The business problem or opportunity

• Timeframe and milestones

Annual Fortune Cost/hr. of a Average cost/hr.

FTE = $100K p.a.

0.1% uptime improvement

60% of time working with other apps

FTE ($) = $100K p.a.

0.1% uptime improvement

60% of time working with other apps

All after-the-fact incidental costs associated with business

• The business problem or opportunity

• Timeframe and milestones

• Comparing AWS to on-premises (high-level):

• Most frequently used pricing tool: AWS Simple Monthly Calculator

• New pricing tool: AWS Pricing Calculator

It enables business and IT leaders to:

• The business problem or opportunity

• Timeframe and milestones

Automated infra ops, security, compliance, and governance

• The business problem or opportunity

• Timeframe and milestones

Use open-source operating system 80%

Use open-source operating system 80%

Rightsize down 1 size 40%

Use open-source operating system 80%

Rightsize down 1 size 40%

Use open-source operating system 80%

Rightsize down 1 size 40%

Amazon EC2 Spot 3%

Use open-source operating system 80%

Rightsize down 1 size 40%

Amazon EC2 Spot 3%

Use open-source operating system 80%

Rightsize down 1 size 40%

Non-prod. Production A Production B

Impact Spot, Serverless,

Monthly AWS Cost Explorer

Digital Training Classroom Training AWS Certification

Find the right APN Partner for your needs: https://aws.amazon.com/partners/find/

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