In this session, we cover practical steps for cost-optimizing your Microsoft workloads on AWS from both a licensing and infrastructure perspective. We discuss ways to diversify and optimize your current licensing investments, how to think strategically about licensing in the cloud, and how to bring your own licenses to AWS. We also cover a variety of additional cost optimization features and approaches, and we explain how these can be applied to Microsoft-specific workloads.

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How to Cost-Optimize your
Microsoft Workloads on AWS
Jill Krzewina Stoddart
Head of Microsoft Workloads on AWS
Amazon Web Services
W I N 2 0 1
@krzewina
Ben Salt
GM – Platform & Reliability
Xero

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What to expect from this session
Understand Microsoft licensing options with AWS
Cost optimization journey for Microsoft workloads
Xero Case Study

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Flexible options for Microsoft licenses
in the AWS Cloud
1. Flexible pay-as-you-go licensing
choices
Shared tenancy
for License Mobility
eligible products with
Software Assurance
AWS licensing
Buy license-included
instances from AWS
(Windows Server, SQL
Server)
Bring licenses to AWS
1
2 3Dedicated options for
licenses not eligible for
License Mobility
1
2
3
Bring your license mobility benefits
to AWS
Bring your legacy licenses to
AWS without paying software
assurance

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License-included instances from AWS
Advantages
 AWS manages the Amazon
Machine Image (AMI)
 Pay per use
 Easy charge-back to business
 No true-ups or software
compliance audits
 No software upgrade fees
SQL Server
• Windows and Linux versions
• Enterprise, Standard & Web
Editions
Windows Server
• New and older versions
• No Client Access Licenses (CALs)
needed
1

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How to bring licenses to AWS
Shared tenancy
for License Mobility
eligible products with
Software Assurance
AWS licensing
Buy license-included
instances from AWS
(Windows Server, SQL
Server)
Bring licenses to AWS
2 3Dedicated options for
licenses not eligible for
License Mobility

8. Shared Tenancy Instances
Customer A
Customer B
Customer C
Customer D
Customer E
Customer E
Multi-tenant servers host instances
for multiple customers
AWS determines which host
instances run on
You pay per-instance
Dedicated Instances
Single-tenant servers host instances
dedicated to one AWS account
AWS determines which host
instances run on
You pay per-instance +
hourly fee per region
Customer A
Dedicated Hosts
Single-tenant servers host instances
dedicated to one AWS account
Launch instances to same physical
server through targeted placement
You pay per-host, per-hour
Customer A
EC2 Instances: Shared and dedicated tenancy

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License Mobility on shared Amazon EC2 instances
AWS does not recommend customers bring Windows Server, Windows
Desktop, Microsoft Office or MSDN to default tenancy.
Microsoft application
with License Mobility
SQL Server with
License Mobility

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Reduce CPU-based licensing costs with Optimize CPU
SQL Server
Enterprise
with
Software
Assurance
(8 cores)
SQL Server
with
Software
Assurance
(4 cores)
40% Savings

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Bring Windows Server licenses to Dedicated Hosts
Dedicated Host
Customer A
 Bring Windows Server licenses
No Software Assurance required
Maximize virtualization benefits of
Windows Datacenter Edition
Customer-provided
Windows Server AMI
Customer-provided
SQL Server
 Minimize SQL Server licenses
No Software Assurance required
Option to license per physical core
Maximize virtualization benefits of SQL
Server Enterprise Edition

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AWS License Manager
A one-stop solution for managing licenses from a variety of software
vendors across hybrid environments
New!
Customize
license rules and
enforce at
resource launch
Reduce
licensing costs
and simplify
true-ups
Manage license usage
across environments
and organizations

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Cost optimization journey
Migration
Planning
Operate
and
Optimize
Measure &
Monitor
Modernize

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Cost optimization starts before migration
Migration
Planning
AWS Migration Assessments
1. Identify AWS resource optimization opportunities
 Over-provisioning for peak
 Over-specified / under-utilized resources
 Outdated hardware requiring significant licensing costs
2. Identify Microsoft license savings
 Reduce CPU configurations
 Leverage BYOL and reduce future EA commitments
 Optimize use of SQL Server Standard

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AWS Migration Assessment Partners
Instance Usage and Optimization OS Classification and Cost Optimization

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Example savings – 22% on SQL Server workloads

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Pillars of cost optimization for compute
Operate
and
Optimize
1. Right-size instances
 Leverage newest instance families
 Provide standardized configurations to developers
2. Increase elasticity
 Smaller instances with auto-scaling
 License-included instances for spikey workloads
 Turn-off non-production instances
3. Leverage EC2 purchasing options
 On demand initially and for spikey workloads
 Convertible Reserved Instances provide flexibility
 Design-in Spot instances

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Get visibility and control of your costs
Measure &
Monitor
1. Implement tagging standards
2. Automate identification of cost
savings
3. Leverage reporting tools

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Enable cost transparency with tagging
Must-have tagging:
• Cost Center
• Application or Workload
• User
• Expiration Date
Optional:
• Automation Support

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Implement best practices at scale with automation
Automation will help you
1. Identify always-on instances
2. Identify instances to downsize
3. Identify warm / cold storage
4. Recommend RIs to purchase
5. Maintain license compliance
6. Report on savings

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Automation tools and reporting options
AWS Services
AWS Cost
Explorer
AWS Cost
and Usage
Report
AWS Trusted
Advisor
AWS Systems
Manager
Import & Visualize
QuickSight, Tableau
(Import cost and usage
reports)

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Modernize applications for ultimate cost savings
Modernize
Microservices
Monolithic Applications
built on proprietary
software

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Migration to cloud
Business Objectives
 Deliver fast paced innovation
 Leverage machine learning
 Increase uptime and security
 Drive better business
outcomes to help small
business flourish
Technical Objectives
 Increased elasticity of
application stack
 Provision new capacity on
demand
 Reduce cost to serve

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Pre-AWS architecture
Application Servers
o VMware clusters
Database
o 4 dedicated servers per SQL Server cluster
o No read only replica
o Split across 2 regions
Storage
o SAN based – expensive, constant upgrades
Back-up / Recovery
o Backups were to disk then tape – always
issues with time it took to get to tape
o No recovery testing
2016 Migration
 700,000 customers
 59 billion records
 500 Windows Severs
 100+ SQL Server databases

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Current architecture
Application Servers
- 3 Regions, 3 AZs in each Region
- 5000 Amazon EC2 Windows instances
- Highly elastic: Auto Scaling, ELBs
Database
- 20+ 5 node SQL Server Always-On
clusters across 2 Regions
Storage, back-up and recovery
- Backups to Amazon S3 (fast!) replicated
to 2nd region and then into Amazon
Glacier (no more tape!)
- Automated recovery testing
99.9%
All-in on
AWS

30. Shared tenancy
for License Mobility
eligible products with
Software Assurance
AWS licensing
Buy license-included
instances from AWS
(Windows Server, SQL
Server)
Bring licenses to AWS
1
2 3
2 Shared tenancy with License Mobility
Potential future use for SQL Server with
Optimize CPU and/or new instances
AWS maintains Windows AMI
Microsoft licensing strategy
License-included for Windows Server
Use for highly elastic Windows workloads
AWS maintains Windows AMI
Dedicated options for
licenses not eligible for
License Mobility
1
3
Dedicated Hosts for SQL Server
clusters
BYOL for Windows Server Datacenter and
SQL Server Enterprise to maximize
virtualization benefits
Requires yearly true-up and good audit
practices – AWS License Manager can help

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Multi-region Always On Availability Group
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Cost savings tips for SQL Server on Dedicated Hosts
Tip 1: Maximize core-based
licensing
- Dedicated Hosts allow us to
license the host cores, not the
instance cores
- Originally used Dedicated
Instances during migration while
building automation
- Moved from R3 Dedicated
Instance to R3 Dedicated Host
(vCPU to physical CPU licensing)
Result: 30% SQL Server savings
Tip 2: Use SSD instances to
improve performance
- SQL Server Buffer Pool
Extensions (BPE) use SSD
- I3 instances have high memory
and SSD for improved
performance
- Reduced SQL Server core licenses
by moving from R3 Dedicated
Host to I3 Dedicated Host.
Result: 20% SQL Server savings

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Cost savings tips for SQL Server on Dedicated Hosts
Tip 3: Maximize host density
- Newer Amazon EC2 instances
types tend to support a higher
instance density
- We replaced two R3 Dedicated
Hosts for one I3 Dedicated Host
Result: 10% EC2 savings
Tip 4: Use passive node benefits
- Software Assurance offers a free
license for a passive secondary
instance when attached to a paid
edition of SQL Server
Result: 20% SQL Server savings

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Amazon EC2 instance optimizations
Leverage burstable instances
• CPU bursting in test
• Currently moving from T2 to T3
(always-on bursting)
Use newest instance families
• Our policy: current generation or
minus one
• Moved from R3 to I3
• Future considerations for SQL:
 R5d includes SSD
 Use Optimize CPU feature
Result: 7% savings
Result: 20% savings on SQL
Server Enterprise Edition

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Amazon EC2 instance optimizations
Automation tips
• Environment shutdowns for dev/test
• Built atop Capital One’s Cloud Custodian policy logic (open source)
• One policy each for suspend, revive resources enacted on a schedule – gives
us back 24 hours of spend / week
• Potential for extending to our global weekend (~42 hours) and overnights
• Tagging dependent
Result: 14% savings and more to come

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Leverage Amazon EC2 pricing options
Reserved Instances (RIs)
• Used on-demand exclusively for first 27 months
• 70% coverage today with Ris
• Current RI strategy
• 50% Convertible / 20% Standard / 30% On Demand with 99% RI utilization
• All 1 Year commitment
• Purchased inside payer account as Regional RIs
Result: 33% savings

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Pricing optimizations – use Amazon EC2 fleet
Combine on-demand and Amazon
EC2 Spot
• Auto-scaling feature
• Using with Kubernetes worker
nodes
• Balance On Demand and EC2
Spot with preference for Spot
• Be mindful of error budgets
• Use appropriate node type for
scaling to minimize cost
Result: 71% savings

39. 1 2 3 4 5 6 7 8 9 10 11 12
Total $
Total Amazon EC2 costs (all pricing options)
1 2 3 4 5 6 7 8 9 10 11 12
Reserved
Hours
On Demand
Hours
Amazon EC2 usage by purchase option
Spot Hours

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What would we do differently?
1. Use Amazon EC2 Fleet sooner
2. Limit available instance types
3. Enforce use of standard RIs based on these
instance types

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Tagging
Why tag?
• Enables software license
management
• Present costs back to user base
• Business agility – easily
implement organization changes
Tagging policies
• Tag every resource
• Every new instance must have
standard set of tags
• Xero Portfolio
• Xero Product
• Owner (email or login)
• 15-minute grace period

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Cloud cost monitoring made easy with tagging
EBS Unattached Volumes by AWS Account

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Cultural and organizational changes
1. Change development culture
• Started with shift to Agile (pre-migration)
• Migrated to cloud
• Adopt DevOps  open source naturally creeps in
2. Replace traditional operations with Site Reliability Engineering
• Embedded into dev teams
• Internal PaaS
3. Move from DBAs to Data Reliability Engineers
• Automate everything – no manual changes to databases
• Log every human query on via DataConsole

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Move to .NET Core
Xero’s mandate:
• No new development on
Windows
• Aspirational Goal
• Today fleet of 5000 instances
• 50% “Linux Workloads”
• Better server density through
container utilization
Why .NET Core?
• Use your own tools
• Build and run anywhere
• Self contained deployments
Expected Savings >50%
reduction in Amazon EC2 spend

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Adopting containers and serverless
Walk before you run
• Start with containers for web
servers and “non essential”
apps
• Get state out of the
applications (Amazon
ElasticCache)
• Server density, estimate what
it is vs on demand
• Serverless is great but it is not
for everything (high
invocation count beware)
Results: 30-50% savings with
Amazon Elastic Container
Service (Amazon ECS)

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What is
it?
Launch of new
products 75% faster
(Unilever)
60% reduced downtime
(Trainline)
50%+ reduction in
TCO (GE)
Over 500 hours per year
of server configuration
time saved (Sage)
Examples
Infrastructure cost
savings / and cost
avoidance
Efficiency improvement
by function on a task by
task basis.
Improved SLAs &
reducing unplanned
outage.
Deploy new features /
applications faster and
reduce errors.
Typical
Focus
Further
Compelling Cloud
Benefits
Cost Savings
(TCO)
Staff
Productivity Business Agility
Operational
Resilience
The economic benefits of cloud extends well beyond
cost savings

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Related breakouts
Wednesday, November 28
Leadership Session: What’s New with Microsoft and .NET on AWS
Time – 3:15pm | Venetian, Level 2, Venetian F
Wednesday, November 28
Simplifying Microsoft Architectures with AWS Services
Time – 4:45pm | MGM, Level 3, Premier Ballroom 319
Thursday, November 29
Operationalizing Microsoft Workloads
Time – 1:45pm | Aria East, Level 1, Joshua 8
Wednesday, November 28
AWS License Manager
Time – 7:00pm | Venetian, Level 3, San Polo 3405

53. Thank you!
© 2018, Amazon Web Services, Inc. or its affiliates. All rights reserved.
Jill Krzewina Stoddart
stoddart@amazon.com
Ben Salt
Ben.salt@xero.com

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