
EC2 Price Reduction (C4, M4, and R3 Instances) - jeffbarr
https://aws.amazon.com/blogs/aws/happy-new-year-ec2-price-reduction-c4-m4-and-r3-instances/
======
wstrange
What I really wish the cloud providers would do is reduce network egress
costs. They seem insanely expensive when compared to dedicated servers.

~~~
fpgaminer
Agreed. I've heard some people say that those prices are kept high to
encourage keeping data locked within the platform; forcing people to use the
provider's services versus shipping data off to other platforms. I'm not sure
if I believe that or not, but it's an interesting theory.

Honestly, the high bandwidth costs have killed a number of ideas I would have
liked to tinker with on AWS. I find the cost of EC2 to be quite good, and
storage cost is tolerable, but $.10/GB of bandwidth-out is horrific.

~~~
tacos
Common misconception. The prices are highly negotiable. Nobody with
significant traffic is paying anything close to book rates.

~~~
wstrange
Network egress costs on AWS appear to be a factor of 10x more than dedicated
servers. Google GCE is pretty much the same.

That is a lot of negotiation that needs to be done. Will they get anywhere
close to that kind of discount?

How big a customer do you need to be?

~~~
Scoundreller
Reading between the lines, I think AWS has a huge upstream bandwidth
bottleneck that it can't get around easily, while spread out small dedi
providers have everything but this problem.

(Speculation based on how AWS prices things: Build big, charge for everything,
charge what it actually costs with a small markup, and put every high-margin
provider out of business)

~~~
davidu
This isn't the case. (speaking from knowledge)

------
Patrick_Devine
With Moore's law now still continuing to double transistor counts every 2.5
years or so, if AWS was serious about passing on savings, it'd reduce the cost
of EC2 instances by about 5% _every couple of months_. That's clearly not
happening, and because compute isn't exactly fungible (despite being called a
"commodity") thanks to things like subsidized data ingress, AWS is making an
absolute killing. The margins, even after building huge datacenters, are
ridiculous.

~~~
discodave
CPU cost is only part of the total cost of an EC2 instance.

According to James Hamilton who speaks on behalf of Amazon, Servers make up
~57% of the cost of running a DC. CPUs are only a fraction of the cost of a
server, maybe 25%.

So moores law only really applies to ~15% of the total cost of EC2. That's
before factoring in all of Amazons capex to build the software that is EC2.

Edit: [http://perspectives.mvdirona.com/2010/09/overall-data-
center...](http://perspectives.mvdirona.com/2010/09/overall-data-center-
costs/)

~~~
Patrick_Devine
Yes, the CPU cost is only a fraction, however, the costs of the rest of server
(ie. storage and memory) also is dropping precipitously, and has for decades.
The cost of networking equipment and any network transit should be factored
into the cost of network egress (which starts at healthy $0.09/GB).

The capex on software is negligible, because the cost of duplication is
effectively zero. AWS can scale to whatever size they want (as long as their
software is architected correctly, of course), and not have to spend more
cash.

That said, I'm not faulting AWS for charging what they charge. They have a
remarkable service. It's just hard to stomach a post bragging about dropping
the price by 5% when they're effectively printing money.

~~~
yazaddaruvala
Do remember Intel builds the CPUs, prices them, and basically has no
competition.

I have no education/insight at all into this matter, but I would keep that in
mind and reconsider your assessment of Moore's law's direct influence on AWS'
bottom line.

------
supersan
I've tweeted to you twice and asked your customer support about this too but I
have never gotten a reply to it. So I'm asking you here.. When are you gonna
allow reserved instances for Indian customers? Right now I cannot purchase
reserved instances and so my bills are much much more than what others are
paying. P.S. Here is the screenshot when I try to purchase. There has been no
update for 1 year now.
[http://i.imgur.com/oZAHMt5.jpg](http://i.imgur.com/oZAHMt5.jpg)

------
iofj
This seems a worthless reduction. I tried having my online dedicated box on
ec2 for a while, cheapest server. Bill per month $120 USD. Yes that is mostly
traffic. It was over 200 the month I decided, foolishly, to host a video on a
blog.

Doing exactly the same on a dedicated provider: 10$ per month. With more
traffic than I did on ec2.

Also, it's an (atom powered) dedicated machine. Performance is far better. 4G
memory instead of 1G. Disk space : 1T (of the rotating kind though), but of
course I can have ramdisk now for most of the stuff. Compared to 100G SSD for
10$ on AWS. But egress traffic, that's what's costing me.

Downtime since switching : 0 (but I will agree that it's lower quality. Not
12x lower though).

~~~
jon-wood
If you're running a single server then I agree, AWS is hideously expensive.
That's not really their market though.

They come into their own when you're running tens to hundreds of servers, with
dependencies between each other, and a use for supporting services such as RDS
and S3.

------
kevindeasis
Does this mean Heroku will reduce their price too?

~~~
joshmn
Nope.

------
imperialdrive
Please follow suit with SSD EBS pricing - 60TB should not be costing me 6k/mo.

~~~
kondro
Why? It's got 3+ redundancy and is simple & fast to snapshot to geographically
redundant backups.

~~~
mikeyouse
Not OP but you could literally buy 3 sets of 60TB hard drives every single
month for less money.. There should be _some_ economy of scale here, no?

~~~
dangrossman
I don't know what kind of hardware Amazon uses, but it looks like 60TB worth
of any kind of SSDs starts at $24K on Newegg. If they're provisioned 3X,
that's 12 months to pay off the drives.

~~~
iofj
3x redundancy doesn't actually require you to triple storage :
[https://en.wikipedia.org/wiki/Hamming(7,4)](https://en.wikipedia.org/wiki/Hamming\(7,4\))

If you check out 3x redundancy, what does it get you ? Well, you can correct
any 1 bit error (not 2, because you wouldn't know which version is the correct
one). Hamming(7,4) with column encoding gets you the same (better in some ways
even). Therefore would you really be lying to your customers if you told them
you gave them 3x redundancy if you used Hamming(7,4), column encoded ? I'd say
no. Because it gets them the same : any disk can fail, and you can rebuild the
data.

If you intend to serve your customers correct bitstreams in the case of
bitflips on the disks, you'd need to read 2 disks even in the case of 3x
redundancy, exactly the same as in the Hamming case. Of course, people might
choose not to do that, but then you only have backups, not redundancy. What
can go wrong with 3x replication reading from one disk is that your system
updates the 3 disks based on information read exclusively from disk 1, which
may turn out to be wrong data.

But Hamming only costs you 175% storage, not 300%. That brings it to ~7
months. And with precomputed lookup tables Hamming decoding is far, far faster
than reading from disk (even without I bet it would still beat it).

Another huge advantage Amazon has is that EBS means they don't have to
allocate SSD space unless a customer actually uses it, not just if they
reserve it (and they pay for it when reserving it). So in practice you do what
? 100% overprovisioning is prudent ? Let's say compression, given that these
are operating system images mostly, gets you another 30-50% or so. If they
dedupe, they could get far more.

On the other hand the newegg figure doesn't include power to actually use
those disks (SSDs are cheap though). Amazon of course doesn't pay anywhere
near full price there either. Then, actually putting stuff onto an EBS ...
amazon charges for that. And of course, Amazon needs to develop a lot of
software to make this happen. So there's various other things not counted
here.

So hardware costs for Amazon would be at most 2-3 months or so until they're
repaid, no more.

~~~
acdha
You're leaving out things like ops & security staffing, etc. not to mention
the physical hardware other than disks: you need servers, cabinets of disks,
etc. all of which need to be purchased, monitored and replaced just like
everything else.

An SSD might use less power but you need more of them and the rest of the
storage server won't change at all.

Finally, I'd love a citation for any compression + dedupe savings at the level
you're seeing for large heterogeneous deployments, not to mention reliable
performance at their scale.

~~~
hrez
As example purestorage.com is all ssd storage with inline compression/dedupe
and quotes 5-10x reduction on VM's.

~~~
acdha
Do they specify the VMs tested? AWS has a lot of different versions of things
in play and most of the people I know fall into two camps: fairly generic VMs
running compute jobs, which probably would compress well, and VMs running huge
databases / image farms / etc. which do not. By VM count I'm sure the former
dominate but by total storage consumption I think the latter wins – I would,
of course, love to see if anyone has hard data.

~~~
hrez
AWS doesn't have that many OS versions. Besides I'd expect huge datasets go
either to S3 or to ephemeral storage like Cassandra clusters etc. EBS isn't
the best place for it. Your mileage may vary etc.

------
voltagex_
Does anyone know how the spot instance prices react to these reductions? For
C4 and M4 I hardly ever use a normal instance.

~~~
Patrick_Devine
I don't have any empirical data, however I believe spot prices wouldn't move.
Spot prices tend to be relatively flat except for odd spikes which AWS uses to
kick off people who use Spot as if were the same as Dedicated Instances.
You're already getting 75-80% off the Dedicated price, so a 5% reduction isn't
going to move the needle all that much.

------
rmykhajliw
Honestly, I wish to have smaller instances like m4.medium or even m4.small,
because right now I have no other option to use for autoscaling group as
m4.large even if it's not more than 80%-90% underutilized.

~~~
fred256
Well, there's m3.medium and the t2.* instances. Any reason why those won't
work for you?

~~~
bostik
Not OP, but I have some data and an answer of sorts. If you have a workload
that is light on CPU but needier on RAM, m4.large is cheaper than m3.large;
m3.medium may not do as it has less than 4GB.

Also, in our experience t2.* instances can't sustain any reasonable network
traffic, but they do work wonderfully for lightweight RESTful systems. So any
workload which serves mostly cached data and needs 6-7 GB per node is best off
with m4.large. At least for Ireland, in our experience a single m4.large can
keep up with bursts of ~120Mbps and sustain around 65Mbps. We have two as edge
nodes for one of our public services, and will probably add a third one soon.
Cutoff point for sustained bandwidth is slightly above 70Mbps, after that it
starts to stutter. The t2.* instances choke and throttle bandwidth way
earlier.

Finding the right instance type for a particular service always takes some
time and experimentation.

------
rodionos
The more SKUs I have sitting on the shelf, the more price reduction
announcements I can make. The difference with Safeway however is that I cannot
take those promotions back. On the other hand, why not? Should we expect to
see AWS announce Mothers Day two-for-one t2.micro deals soon, while supplies
last?

------
PaulHoule
Woohoo! I love R3 instances.

~~~
ronreiter
ME TOO!

