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ME 312 Project Report

Optimizing Cloud Computing and Storage Costs

ME 312 Project | Group 9
Nikhil Thakre | Dhruv Patel | Anjali Ajay Prabhakar | Jayant Dharmale

(210100161) (21010109) (210100016) (210100115)

1. INTRODUCTION
The effective management of cloud computing and
storage resources is paramount for Software as a Service
(SAAS) companies striving to balance performance with
cost efficiency. By exploring strategies to minimize
expenditure without compromising operational efficacy,
this study aims to provide valuable insights for SAAS
enterprises navigating the complexities of cloud
infrastructure management.
The motivation behind this study arises from the
pervasive reliance of SAAS companies on cloud
computing and storage services, which often constitute a
substantial portion of their operational expenses.
Recognizing the imperative to optimize resource
allocation in the face of finite financial resources, this
endeavor seeks to uncover strategies for mitigating costs
while ensuring scalability and performance.
2. OBJECTIVES:
Our objective here is to optimize the simplified system of
cloud computing that we have used in the domains of
cost,space and time while keeping in mind some other
external factors so as to understand the results better, and
the interdependence of the 3.
3. ALGORITHM:
In the use of the greedy process, we used the hillside
algorithm to minimize the cost with budget and space
(optional) constraints. Going through various iterations
there were 2 major problems that we faced with the use
of such an algorithm. Firstly, the time taken for running
the algorithm is much longer compared to a model
approach. Secondly, there are higher errors as this
process/algorithm simply focuses on local
minima/maxima(for profit) rather than the global
counterpart.

Assuming a company requires some number of resources
daily. This need is different for different days, depending
on various factors like user traffic or internal testing.
These resources can be bought from cloud service
providers like AWS, Azure, or Google Cloud.
Variables : Reserved and On-Demand Instances
Constraints: Total Budget constraint,daily demand
fulfillment of instances required.
4. COST OPTIMISATION

For the project, we took the case of AWS where these
resources can be bought in the form of EC2 instances. EC2
stands for Elastic Compute Cloud, which means these
instances can be customized based on the company’s
needs. So the primary aim of this project is to find how
different factors affect the total cost to the company and
how it can be optimized.
In the initial understanding of the simplified system we
have created, cost optimisation becomes the first step to
understand the process. Here, variables are Reserved
and On-Demand Instances and the constraint is simply
that of Total no. of instances per day. Firstly we took a
constant discount d, irrespective of the reserved
instances bought.

For this project, we took 2 types of instances, namely

reserved instance and on-demand instance. For this
project, we assumed that reserved instances are bought
at the start of the month. A contact number of instances
will be provided on a daily basis and if not used these
will be wasted. On the other hand, on-demand instances
can be bought anytime during the month whenever extra
instances are required. Reserved instances can be bought
with a discount compared to on-demand instances. The
discount depends on the amount of reserved instances
bought, which can be up to 80%. So the dilemma here is
to decide how many reserved instances are to be bought
at the start of the month and how much should the
company rely on on-demand instances.
Required instances
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ME 312 Project Report

In this project, we create a hypothetical distribution of

the required instances over the month.

Variables : Reserved Instances (Xr) and On-Demand

Instances (Xod)

Constraints: Daily demand fulfillment of instances

required i.e. Xr + X0d >= n

Objective function : minimize( 30 * Xr * C * (1 - d) +

sum(Xod) * C)

Known data : Cost of instances (C), daily need of

instances (n).
Solution we got: In this plot, we can see that total cost decreases as the
discount increases, even though the wasted instances
increase. This is quite understandable, yet the
distribution of total cost vs instances wasted is
interesting, as given below.

Optimal Solution Found:

Total Cost: 33360.0
Reserved Instances: 115.0

5. DIFFERENT DISCOUNTS
The discount depends on the number of required
instances bought. So we need to see how the previous
results change with the change in discount. So we tried
to get various results on different variables.
Following are the results:
It the above plot, for multiple values of discount, we got
some number of instances wasted while the total cost
changes.
Later, we tried to update the objective function and
include discount as a variable.
Most basic assumption of discount would be to make it
vary linearly with the reserved instances. However we
were not able to find a proper solution when discount
was a linear function of reserved instances, Xr.
So we took the discount as a step function and made an
objective function using binary functions.

In this plot, we can see that as the discount increases, the
number of instances that are wasted, that is the reserved
instances that were not used, increases.
6. GROWTH FUNCTION
Given that we are taking a distribution of instances
required from last month. We implemented a growth
function which can be considered as a prediction
function which modifies the past data based on various
factors like trends, news,etc.
We for example have taken an exponential function in
our implementation .

ME 312 Project Report
7. SPACE AND COST OPTIMISATION
In optimizing cloud computing, variables like Reserved
and On-Demand Instances must balance cost and
productivity. Constraints include budget and spatial
limitations, while the objective function minimizes total
cost and space. Assumptions prioritize Reserved
Instances for cost efficiency, mitigated by strategic
On-Demand Instance procurement for productivity
enhancement.
Variables : Reserved and On-Demand Instances
Constraints: Total Budget constraint , Total space
constraint , daily demand fulfillment of instances
required.
Objective function : minimize(w * total_cost + (1 - w) *
total_space)
w=weight factor
Assumptions : Space required for computing is also
important and more space usage reduces productivity so
now we optimize both cost and space.
Known data : Cost of instances, space occupied by
instances , daily need of instances,weight parameter
value
Results :
3
Figure 1 : Instances and space used plot
Optimal Solution Found:
Total Cost: 25258.8
Reserved Instances: 144.0
Total Space Cost: 5442.0
Total Space used: 4872.0
8.INTEGRATION OF CPU & GPU
Incorporating both CPU and GPU into cost and space
optimization endeavors presents a complex task;
upgrading necessitates strategic consideration of their
respective cost implications and spatial requirements.
Achieving this optimization entails striking a delicate
balance between maximizing computational efficiency
and managing resource allocation effectively.
Variables : Reserved and On-Demand Instances for
CPU & GPU separately
Constraints: Total Budget constraint , total space
constraint , daily demand fulfillment of instances
required , total GPU usage constraint and total CPU
usage constraint

ME 312 Project Report
Objective function : minimize(w * total_cost + (1 - w) *
total_space)
w=weight factor
Assumptions : Space and cost of instances computed on
CPU and GPU are different and the number of CPU &
GPU used also vary for each reserved and on demand.
Known data : Cost of instances for CPU & GPU, space
occupied by instances in GPU & CPU , daily need of
instances,weight parameter value
Results :
Optimal Solution Found:
Reserved Instances: 181.55128205128204
GPUfor reserved: 50.25641025641027
GPU for on demand: 41.34615384615383
total GPU: 91.6025641025641
CPUfor reserved: 131.29487179487177
CPU for ondemand:0
totalCPU:131.29487179487177
total_ondemand Instances: 41.34615
Total Cost: 121963.07692307688
4
GPU_space: 18489.230769230773
CPU_space: 31510.769230769223
Space_used: 50000.0
9. TIME , SPACE AND OPTIMISATION :
Incorporating time optimization alongside cost and
space considerations further complicates the integration
of CPU and GPU, as upgrades must also account for
minimizing processing time. Achieving this
comprehensive optimization requires meticulous
planning to balance cost-effectiveness, spatial efficiency,
and timely task completion.
Variables : Reserved and On-Demand Instances for
CPU & GPU separately , time taken by CPU & GPU
separately .
Constraints: Total Budget constraint, total space
constraint, daily demand fulfillment of instances
required, total GPU usage constraint and total CPU
usage constraint
Objective function : minimize(w * total_cost + (1 - w) *
total_space)
w=weight factor
Assumptions : Time varies for computing an instance on
CPU and on GPU.
Known data : Cost of instances for CPU & GPU, space
occupied by instances in GPU & CPU , daily need of
instances,weight parameter value, time parameter value.
Results :
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ME 312 Project Report

4. Jayant:
● Variable discount
● Presentation

10. Link to the code and materials

1. code -
https://colab.research.google.com/drive/1cpS2B
gJs8dRHP53gycffOhBF8mPnFqJh?usp=sharing
2. Algorithm (codes):
https://colab.research.google.com/drive/152Vq
krClR7naUDA5ybh1P7k_5SVTf9wI?usp=sharin
g
https://colab.research.google.com/drive/1INotD
Optimal Solution Found:
VQCGGU4qrg0u9mVHx2nF6DQi-1F?usp=shari
Reserved Instances: 178.0 ng
total GPU: 94.13333333333333 https://colab.research.google.com/drive/1Bufef
totalCPU:137.86666666666662 Qff5HI99x5m86HHGl2HrJy4rIph?usp=sharing
total_ondemand Instances:
53.99999999999993 https://colab.research.google.com/drive/1xwA3
Total time(hrs): 1753.3666666666666 V1CjCuP5Li7xUeEjqKGuyc25Qt8a?usp=sharing
Total Cost: 359903.99999999994
GPU_space: 14966.400000000021
CPU_space: 33087.999999999985 3. presentation-https://www.canva.com/design/D
AGEAaZwi5I/DNl3i83YjN2iLr7j20ZN6Q/edit
10. Contributions:
1. Nikhil Thakre (210100161) -
● Integration of growth function and cost
optimization for a month .
● Coding for variable discount function
● Cost and space optimization with weighted
optimization.
● Cost and space optimization with integration of
CPU and GPU complexity (4 variables, 5
constraints)
● Time complexity integration in cost & space
optimisation
● Plottings and visualizations of the above work

2. Dhruv
● Defining the problem statement and factors to
be included in the project.
● Formulating the cost optimization model and
implementing its code.
● Exploring the effect of discount and defining the
variable discount model.
● Visualization and plots.

3. Anjali Ajay Prabhakar (210100016)

● Basic Cost Optimization formulation + coding

● Algorithm for the basic cost optimization using
hillside algorithm, creating required snippets for
budget constraint, loss factor and max. profit.
● Algorithm with space optimization constraints
for the non-cost optimization model.