Using the AWS TCO Calculator to estimate your AWS analytics investments? Here’s what you need to know.

 In Accelerite Blog

A mind-boggling array of factors determines the cost of moving infrastructure from your on-premises datacenter to AWS. For starters, AWS offers over fifty virtual machines or instance types to choose from. These include various combinations of compute power, storage, memory, networking capacity, and more. The bulk of your AWS monthly expense depends on the instance type you use and the duration you use it for. AWS sticker shock has become a common occurrence at a lot of organizations, leaving executives stunned at unanticipated hikes in their monthly bills.  According to a recent survey by SoftwareONE, 37% of organizations report unpredictable budget costs to be one of the biggest pain points in managing cloud environments.

The AWS TCO Calculator is a good starting point for companies to understand what they will end up paying when using AWS versus running their datacenter. The calculator asks you to describe your current server and storage configuration and instantly provides a cost comparison report with AWS. However, before making your decision about moving your applications to AWS based on cost savings shown by the calculator, you need to look out for some assumptions and fine print mentioned on the summary report page.

On-Prem Server and AWS EC2 Cost Assumptions

  • The calculator assumes that your on-prem servers have 8 core CPUs with 96 GB/256 GB RAM. So, you may end up requiring 50 such physical server machines, when you can get the same compute power by using 25 physical servers with 16 core CPUs and 256 GB/512 GB RAM at the same cost. Reducing the server count will reduce rack space, associated overheads and in-turn the on-premises cost.
  • On-prem rack space utilization is assumed to be 75% of capacity, i.e. only 32U are used out of 42U. So, using high compute density servers will help you save on rack space. Also, your rack space utilization pattern may be different for you and will change your overall cost.
  • On-prem hot spare capacity (assumed to be 5% of the total server count per year) generally provides reliability and high-availability in data center environments. Spare capacity is calculated for 3 years (a total of 15%). So, make sure that while providing information related to on-premises servers, you aren’t adding this spare capacity count as that would duplicate the cost. Also, you may have factored in the DR setup count in the input, and the calculator doesn’t have any way for you to specify that.
  • On-prem overheads are assumed to be 33%-35% of the server hardware cost and include DC floor space, electricity cost with redundant power supply, etc. However, references considered in the calculator are US based only (changing the currency or the region does not change the reference). The cost will vary based on the country you are located in (and is likely to be much lower in many cases).
  • On-prem admin / IT labor cost is assumed to be a part of overhead costs (most likely with US Salary), but its exact percentage is not shown explicitly in the calculations (the reference page for salaries-,  currently throws a ‘not found’ error). Average network admin efforts are assumed to be 8% of the total IT administration effort based on the reference report from 2013.
  • For AWS, the calculator assumes a 3-year upfront payment, which means that you are going to reserve all the VM instances for 3 years. If you choose to not book it for 3 years and go with a 1-year reservation or on-demand only, then your cost is going to rise significantly. Typically, an on-demand instance is at least 2.5 times higher as compared to a 3-year reservation, while the 1-year reservation is 1.5 times higher than the 3-year plan.
  • The input you provide to the calculator is in terms of core CPU, whereas the VM you get on AWS uses vCPU. In AWS terms, each vCPU is a hyperthread of an Intel Xeon core, which has an HT factor of 2. This means an AWS VM with 2 CPUs is internally using a single core on a physical CPU.
  • If you have DR requirements and want to set them up in AWS, you need to choose different regions for the same. While resource (compute/storage) costs may be close to the costs shown by the calculator (since the resource count remains the same, it is just divided across regions), using multiple regions will increase your data transfer costs, which is not taken into account in the model used by the AWS Calculator.

On-Prem and AWS Storage Cost Assumptions

  • The on-prem storage capacity you specify is considered as ‘raw capacity’. This ‘raw capacity’ is initially reduced by 7% on account of OS overheads and further reduced by 50% assuming a RAID-10 configuration. So, in the model, the ‘usable capacity’ you are left with is less than 50% of the raw capacity you specified.
  • For calculating backup costs, backup is assumed to be ‘raw capacity’ and not ‘usable capacity’. The calculator doesn’t check if your specifications already include backup capacity hence you need to ensure that you provide accurate data.
  • Prices for on-prem SAN and Object Storage are calculated per GB, whereas if you calculate the same on a per TB basis because your storage requirements are in several TBs or more, the prices will drop significantly. However, the calculator does mention that the model assumes higher prices to account for the price of Host Bus Adapters (HBA), Fiber Channel Adapters, Optical or Fiber Channel Cables and other storage equipment.
  • The reference link for on-prem storage prices is from 2013. Storage prices have dropped significantly from 2013 to date (and the same trend can be seen from 2011 to 2013 in the reference link itself). So today, you can get storage at a much cheaper rate than reflected by the calculator.
  • On-prem storage cost includes an overhead that is 29% of the storage hardware cost and covers DC floor space, electricity costs with redundant power supply, etc. Refer to related points in server costs above.
  • For AWS, the calculator assumes storage capacity to be equal to the ‘usable’ capacity calculated for an on-premises setup based on the input provided (and not equal to the actual value of the input). If you want the AWS capacity to be equal to the actual input provided, your storage cost will be doubled.
  • Backup requirements are not taken into consideration in AWS. If you need backup in AWS, you’ll need to spend an extra amount on top of what’s already shown by the calculator.
  • There’s a cost associated with snapshots in AWS and only one snapshot is taken into consideration over a 3-year duration in AWS costing.

On-Prem and AWS Networking Assumptions

  • On-prem network hardware and software costs are approximated to 20% of server and rack hardware cost. An additional 15% (of network hardware cost) per year is calculated for annual maintenance (so 45% over 3 years). However, your specific hardware cost may vary based on the components you choose.
  • The calculator assumes that 20% of network traffic goes in and out of the on-prem datacenter. Though this is a good approximation, your actual traffic may vary based on applications hosted in your datacenter, and hence the bandwidth required and the price you pay for the same will also vary.
  • For AWS, the calculator takes into account costs for only compute, storage, and business level support. Networking, which is given separate attention in on-premises cost calculations, is missing from the AWS cost. You will likely need a firewall, load balancers, and elastic IPs. Using these resources in AWS will increase your costs, which doesn’t show up in the model.
  • You’ll need Internet connectivity to access your environment in AWS too. The bandwidth requirement would vary depending on the size of your environment and type of your applications in AWS and will add up to the total cost.
  • While Amazon doesn’t charge you for data going into AWS, you’ll have to pay for data coming out of AWS. This cost is also not shown in AWS calculator.
  • Running applications in AWS will not eliminate all the labor costs. You’ll still need a team which will manage and maintain the VM setup in AWS and ensure it’s available whenever required (sometimes 24×7).

Calculating the actual costs of moving analytics or other infrastructure to AWS can be frustrating. Usually, for major cloud analytics applications, companies have no idea what they are going to pay until they start using the applications. Which is why, if you are thinking of moving analytics workloads to AWS, choosing a tool like ShareInsights 3.0 will deliver a plethora of benefits. ShareInsights offers no-code analytics on AWS data lakes and, most importantly, it provides price and time forecasting for AWS, so users can understand the performance and cost of each service based on the individual workloads they intend to run. It masks the complexities of AWS analytics technologies in a drag-and-drop analytics designer that lets you design both transformation pipelines and visualizations without any programming. It integrates flawlessly with S3, Glue, EMR, Spark, and more.  You can now embrace all AWS analytics offerings without the need to worry about sticker shock from the AWS bill or data engineering expertise!

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