

Be Careful When Comparing AWS Costs...   - bluemoon
http://aws.typepad.com/aws/2012/02/be-careful-when-comparing-aws-costs.html

======
cmer
EC2 is about 10-20 times more expensive than dedicated hosting. Even if
reserved instances save us 22% over 3 years, it still doesn't even come close.
Reserved instances also force me to commit to using a certain type of EC2
instance for 3 years with lots of money upfront. Moreover, IO is ridiculously
bad on EC2 and there's nothing that can be done about it. Even RAIDing a
gazillion EBS volumes together doesn't do much.

I'm glad the truth about how expensive EC2 really is is starting to come out.
Hopefully it will force them to revise their pricing, or at least offer more
processing power for the same price.

I ran some benchmarks a few weeks ago that show how expensive EC2 really is
[http://blog.carlmercier.com/2012/01/05/ec2-is-basically-
one-...](http://blog.carlmercier.com/2012/01/05/ec2-is-basically-one-big-
ripoff/).

That said, I _love_ the flexibility of AWS. RDS, S3, EBS and the whole
ecosystem is really well thought out. I just wish I could get real performance
out of it.

EDIT: 10-20 times more expensive, not "orders of magnitude"

~~~
nirvana
I'm sorry to see you're being down voted. For one of my comparisons, Amazon is
orders of magnitude more expensive (because I get bandwidth for free as part
of the dedicated server package while Amazon charges... even though the
dedicated server is both cheaper and significantly more performant than EC2
instances.)

You made a good argument, made some good points, and you linked to a blog
article with real data, so naturally you're getting down voted.

I think its a shame that people apparently fall of the "amazon is a tech
company" propaganda. I've worked there. It was like working for walmart. Its
not like working for Microsoft (worked there too.) The Amazon hype machine is
very strong, but people don't seem to realize it, and the amazon hype isn't
strictly honest. (EG: They claimed AWS was "running Amazon.com" at a time when
none of Amazon.com was running on AWS. They "leaked" the kindle fire to build
hype, and brag about how its selling so well, but never release honest
numbers, only bundling the fire with all the other kindles in the few numbers
they've released. Lots of puff pieces clearly orchestrated by PR firms trying
to paint bezos as a visionary, etc. etc.)

~~~
pestaa
> _trying to paint bezos as a visionary_

I read about Bezos in Google+ (it was by Steve Yegge, I suppose) and from
that, it seemed like he is a jerk but more importantly, a visionary, not
unlike Steve Jobs.

What's your take, if I may ask?

~~~
nirvana
I've been in the same room with both, and I think they are polar opposites.

Jerk: Steve Jobs is not a jerk. He's opinionated, and I think many people
can't stand that. But at his core, his biggest crime is probably being too
honest (e.g.: being honest about what he thinks.) Jeff Bezos: He is a jerk.
He's been a jerk to me. For him, being nice is a facade, but in reality, he's
got no consideration for other people-- to him other people are ... things to
be used for his own benefit. He doesn't have compassion. I believe Jobs has
compassion at a very profound level.

Visionary: I don't ilke this term. Steve Jobs though probably does fit,
because he focuses on the future, he focuses on the product. He is extremely
product focused, product obsessed, and thus he manages to bring about products
that have a huge, significant impact. Again, I think Bezos is the opposite.
Amazon does hundreds of initiatives each year. The main thing Bezos seems to
want out of a product is a press release. I think this is true of even things
like AWS. They just throw things on the wall. All of the engineering at Amazon
is half assed. (their software was out of date 15 years ago, and is poorly
engineered.) They do movie reviews, they do movie show times, they scan
restaurant menus, they do a search engine, they have e-readers, now they're
competing on tablets, they're a retail operation, they are expanding
internationally (yet in many countries outside the USA they haven't done squat
because "expanding internationally" played really well on wall street during
the dotcom boom but isn't so important now so they don't care so much.)

The only redeeming quality Amazon has is that they treat their customers well
(not their employees, not their suppliers, not their partners, not anyone,
just customers.) They also had good timing and got into commerce at a
brilliant time.

Jeff Bezos is a failed financial analyst who parlayed connections and a lot of
dumb money in the dotcom period into the biggest stock scam ever (I think
Amazon is still a stock scam-- it has a real business but its stock is
massively overvalued and I really don't trust their accounting.)

Here's the proof: Jobs did not seek out publicity for himself, except when he
wanted to sell a product. The product was always Apple's latest-- then he'd
appear on magazine covers. Bezos is the product, and he, and his PR firm, are
pitching him as a visionary-- this is all smoke to get investors to continue
to allow Amazon to operate at essentially a loss because its core business is
just retailing. Apple is a high tech company that invents totally new
technologies-- Amazon is a retailer pretending to be a high tech company.

I have worked for Amazon, but have not worked (as an employee) for Apple,
though I have worked with Apple in other capacities.

------
DanBlake
AWS should have shaved down the cost of the dedicated unit as well, if we are
in cost cutting mode. Those prices would look very different if they just used
some plain jane boxes from 100tb.com or leaseweb.

In order for AWS to make sense, you need to utilize the hourly billing. If you
use EC2 and leave you server on 24/7, you are going to be paying more for less
powerful hardware than you could with dedicated. Yes, they have a fancy
datacenter and instant provisioning and cool backups. You are still paying
more. Way more in some cases.

*This does not apply for tiny websites. If your hosting bill is 100$ or less a month, amazon is likely fine for you and maybe the most effective cost saver. Once you go above that mark, Its almost always more effective to be on dedicated unless you are one of the very few people who has truely hourly based service (Think, a seti@home where you only crunch data once a month) - Any normal "website" will do better with dedicated.

Finally, to summarize the above. EC2's main, most important, if-you-arent-
using-it-you-are-doing-it-wrong, feature is HOURLY BILLING. If you dont
constantly switch on and off from different sizes (and you spend a decent
amount of cash) then dedicated is likely better for you.

Dont get me wrong, EC2 is great. But use it for overflow. Or use it for the
bells and whistles. Or use it because you have more cash and you would rather
not deal with the issues and you like simpledb and yadda yadda yadda. Use it
for whatever reason you like. Just dont use it because its cheaper. Because
its not.

~~~
burgerbrain
"*This does not apply for tiny websites. If your hosting bill is 100$ or less
a month, amazon is likely fine for you and maybe the most effective cost
saver."

I was going to say this. Using an US-East micro instance reserved for 3 years
is cheap as hell for my screen/irssi and occasional VPN needs. The cost per
month is something like the change I currently have in my pocket.

~~~
timc3
It's still not your cheapest option in many ways, but sometimes. Cheap enough
is good.

~~~
Wilya
Actually, for this precise use case, it might well be among the cheapest.

With a 3-year reserved instance, using the "intensive usage" pricing (since
it's always on), and in the cheapest availability zone. I get a price of
6.42$/month. I guess in practice, even for an personal thing, around 10GB of
storage would be required (1$) (does the installed OS counts towards this
number ?). Add 10GB of transfered data (1$), as a vpn/screen server is
unlikely to have huge amounts of incoming data.

The final price is 8.42$. Which, for a 600MB ram server, is quite competitive.
If I didn't forget something.

This is about the only use case where I would recommend AWS, though. Starting
at ~25/30$, there are way better alternatives (including cheap dedicated). And
if you need more bandwidth, cheap VPS tend to come with 20 or 100GB/month at
least. But you'd get less RAM.

~~~
barrkel
For my ssh proxy needs (primarily, routing around geo-IP locating me in the
UK, and instead appearing from a US IP), 600MB is overkill. As a result, I pay
36 USD a year for a Xen virtualized box with 128MB ram and allegedly 300GB
data a month (though I never get anywhere near that). That's 3 USD a month.
And if I was buying a new similar server today, I could probably get something
better and cheaper.

If you don't need much, <http://www.lowendbox.com/> is a good site to see
what's out there.

------
benologist
This was disappointingly dishonest: they shave the AWS numbers down to a few
grand under the self-hosting cost and end on a note saying these analyses
should be done apples-to-apples, but neglect to point out the far more
expensively flawed methodology in the self-hosting cost: _buying_ and
colocating 131 _dedicated_ servers based on the peak requirement of 131
_leased_ EC2 _virtual_ servers.

For those interested it's Amazon's rebuttal to the story discussed here:
<http://news.ycombinator.com/item?id=3580273>

~~~
efalcao
I don't understand why the methodology is flawed: the objective isn't to price
N servers. The objective is to serve all the load at the best price. If you
need 131 during peak and 20 during off-peak and can not pay for the delta-
yay!

My company works in the media space and I love EC2- during the week our loads
are low but when it's Superbowl Sunday or the GRAMMYs, the ability to spin up
capacity is huge. But the fact that I'm _not_ paying for that capacity 24/7 is
even bigger.

------
newhouseb
The cost that everyone fails to recognize is the cost (performance-wise) of
virtualization. Simply comparing X instances of EC2 to X instances of bare
metal ignores the fact that a bare metal instance could range anywhere from 1x
to 50x more performance for equivalent specifications. For memory bound
applications you might get equivalent performance for the specs but for IOPS-
bound or CPU-bound you'll probably take an order of magnitude performance hit
for the same specification of hardware when virtualized.

Any analysis like this needs to first find a set of comparable servers that
have performance parity (for the given application) first instead of merely
specification parity.

~~~
asharp
You are correct in that you need performance parity for two items to be
comparable.

You are incorrect in saying that you take an order of magnitude performance
hit when Virtualization, especially for CPU bound tasks [1].

In terms of disk you are slightly more correct, you can lose substantial
performance, however it's still not an order of magnitude.

[1] [http://blog.xen.org/index.php/2011/11/29/baremetal-vs-xen-
vs...](http://blog.xen.org/index.php/2011/11/29/baremetal-vs-xen-vs-kvm-
redux/) (A series of benchmarks showing a disparity of ~1% off bare metal on
CPU bound tasks.)

~~~
newhouseb
A better comparison might be dedicated hardware versus virtualized in EC2 than
virtualized on stand alone hardware as EC2 is a shared environment.

I understand that technically there shouldn't be much disparity for CPU bound
tasks (because most instructions are translated directly), but our benchmarks
show a 40x performance hit for heavily CPU bound, single threaded tasks
between a large EC2 instance and an entry level softlayer dedicated box (doing
computer vision work). Perhaps it's a caching issue caused by Xen and other
VMs sharing the hardware or perhaps its the fact that EC2 is built on older
hardware that might not support some of the more advanced CPU features.
Regardless, core for core on a anecdotal level, we have seen a stunningly
large impact by switching to dedicated hardware.

~~~
asharp
Keep in mind that EC2 is simply one _very_ specific case, and you can sum up a
good portion of its problems with "It's designed to be cheap to build".

------
nathanhammond
About a month ago I did a bit of pricing for having a permanently-on dedicated
virtual server through Amazon:

Micro - $105.80/yr (reserved instance)

Bandwidth - $0.00/mo (light transfer usage)

S3 - $0.20/mo (combining storage and transfer)

CloudFront - $0.20/mo (combining requests and transfer)

After a quick glance around I found that it was going to be impossible to beat
that price, most especially for the services gained by using AWS (CloudFront,
S3, CLI interface + tools, ability to spin up an instance behind the scenes
and swap over to it once properly configured...)

The moral of this story is to _make sure that you price out the cost of using
any platform for your particular usage profile_.

------
foobarbazetc
This is the biggest, most dishonest, load of shit I've ever read by Amazon.

Yes, there are interesting aspects to AWS. But I could host servers at
SoftLayer with 10x more power than AWS instances at a 5-10x price reduction.

Even hosting at an overpriced "managed" dedicated provider like Rackspace
would run you less than AWS.

~~~
X-Istence
It's a shame that Softlayer bought The Planet. I used to host with the The
Planet at their bargain brand Servermatrix and they used to have some very
good deals, these days Softlayer is charging higher and higher prices, pricing
them out of my range.

I wish I could find a good DC that sold me unmanaged servers for cheap. I just
need someone to keep the power on, the BW flowing (preferably no Cogent) and
when hardware breaks to replace it. I'll take care of the rest.

~~~
pestaa
> _I just need someone ... when hardware breaks to replace it_

I'm not a sysadmin, so I might be terribly wrong here, but isn't this the very
definition of managed hosting?

~~~
X-Istence
managed generally means that the datacenter/provider also takes care of OS
upgrades, installing patches, installing software as required. unmanaged
generally means hands off except for hardware related tasks, and generally if
it is the fault of the sys-admin then they might charge and hourly fee for it.

~~~
pestaa
So can it be possible that some providers use these terms interchangeably? One
says "it's managed because we take care of the hardware", the other says "it's
unmanaged because we don't take care of the software." Seems confusing to me.

I definitely understand why you would want to take responsibility for OS
upgrades and the like.

~~~
X-Istence
If I am leasing the machine I expect it to be "managed" in that someone takes
care of the hardware. I expect it to be unmanaged when it comes to OS,
software and all that fun stuff.

This seems to be fairly standard throughout the industry, when you look at
unmanaged hosting you get no OS support but do get hardware support. And when
leasing a server that is what I expect.

------
ridruejo
We have thousands of users who run their servers on Amazon using one of our
AMIs (<http://bitnami.org>) Whether EC2 is more or less expensive than the
alternatives is a complex topic highly dependent on your particular
requirements. Having said that, our perspective is that you need to consider
the overall value you get for your money. There are features like the ability
to take incremental snapshots of your entire machine for backup or cloning
purposes that have no match by other hosting providers. That feature alone
saves us innumerable hours of development and system administration. Our
staging servers are not setup like or production servers, they can _be_ exact
copies of your production servers, on demand. How many bugs/issues do you
think we avoid with that? For us, enough of them that any price difference
with a "traditional" setup is not worth it

------
ddon
We at Fotki were approached several times by Amazon, and they tried to make us
switch, and every time we calculated, we were getting around $75..100K per
month just for storage, not including traffic and other stuff... It is pretty
much true that their price is 10x or 20x of owning your own hardware.

------
ypcx
I would say, everything considered (thus inevitably comparing apples and
oranges at least in some respect), hosting options ordered by longer-term cost
from lowest to highest:

1\. colocation w/ yours or your admin team physical access

2\. AWS

3\. normal hosting

And I've put AWS on the 2nd place only due to the ability of replacing or
scaling your hardware in minutes.

It's good to know that for $11k a year (paid upfront) plus traffic costs one
can run their biggest GPU instance on 10GigE connection, or a 60 GB RAM
machine on a normal connection.

I think AWS is absolutely unbeatable for startups where you are not sure about
the success upfront.

Also, I'm running my Node.js sites on a Micro instance which I have free for
the first year, and $16/mo onwards.

~~~
ypcx
I wish the downvote action here on HN included a mandatory reason textbox
where you'd have to write why you have downvoted, and this action itself would
be downvotable. So much political bullshit going on here.

~~~
ericd
I would expect that any downvotes are because there aren't many scenarios
where amazon is cheaper long term than leased dedicated servers.

------
mark_l_watson
I think a fair comparison is very complicated and depends a lot on: do you
need to occasionally ramp up the number of servers, do services like Elastic
Map Reduce work well in your system for occasional data crunching, do SimpleDB
and DynamoDB fit in your architecture, does EBS with high durabilty but slower
IO performance meet your needs, does having lots of cheap S3 storage with free
inner-data region bandwidth save you money?

If enough of these considerations match your needs, then AWS looks great,
otherwise look to dedicated servers.

~~~
nirvana
If those considerations matched my needs, AWS wouldn't look great because I
don't want vendor lock in. That's why they're able to charge high prices--
once you build on their platform, you can't easily migrate elsewhere.

I want to save time by not having to learn Amazon specific APIs (which seem to
be terribly engineered, cause every time I want to throw a small project that
way I find myself in a morass of poor documentation and way too complificated
configurations.)

So, I see that really as an added cost.

~~~
yummyfajitas
You are only locked in if you use SimpleDB, dynamo, SQS, etc.

Most of the standard infrastructure is quite replaceable. S3 can be easily
replaced by more or less any file storage system (in Django it's 1 line of
configuration), ELB can be replaced by any load balancer, ec2 by dedicated
servers, etc.

Admittedly, some code changes are required, but nothing architectural (e.g.,
S3BotoStorage -> RackspaceStorage in django). For anything bigger than a hobby
project, it shouldn't be a major barrier.

------
rkalla
I am surprised I don't see the geographic distribution of AWS as a huge
appealing aspect of the service.

If you are trying to deploy a global solution, I don't know any way as cost
effective as rolling out images to all the regions you need and rolling out
the same scripts, knowledge, strategies to each region to get your service up
and running.

Opening accounts with dedicated providers in each country as an alternative
sounds infinitely more painful.

------
okrasz
AWS is cost effective in some scenarios while not in others. It really
strongly depends on actual needs, what resources are needed, in what
proportion, etc. There is an article which tries to answer if Amazon is really
the cheapest provider: [http://blog.cloudorado.com/2011/08/is-amazon-cheapest-
cloud-...](http://blog.cloudorado.com/2011/08/is-amazon-cheapest-cloud-
computing.html)

You can compare the prices with custom configurations of multiple providers
with Cloudorado - <http://www.cloudorado.com>.

------
nivertech
In order to be competitive with dedicated hosting, AWS should introduce per-
month heavy utilization pricing option. 1 and 3 years is too long to commit
for startups.

------
jtchang
I've never contracted out for bandwidth but do they charge you extra if you
under commit?

~~~
Dobbs
A commit is just that a commitment to buy "x" amount of bandwidth.

If you have a commit for 500Mbps at $1 a Mbps on the 95th then you will pay at
least $500 a month regardless of how little you use. If you end up using 1Gbps
then you will pay $1000 a month.

As far as I'm aware there are no extra charges beyond the price for the commit
and any MRC (Monthly Recurring Charges) your account may have. Though my boss
takes care of that paperwork so I might be mistaken.

~~~
nknight
I'm generally right in the middle of said paperwork, and you've got it right.
The main caveat is that overage cost is often (though not always) higher than
the commit.

(The other caveat is I've never seen $1/mbps transit, if you find it, let me
know. :))

------
fasteddie31003
One thing I've always thought about the three-year reserved instance is what
happens if AWS lowers the price on the configuration, you've already lock in
on the higher price. Three years is a lot of time, technology advances quickly
and prices decrease, but if you lock in on the three-year contract, you won't
see the benefits of lower costs. Actually, now that I write this, maybe this
is how Amazon justifies the lower price for longer contracts.

