1. OPNET Technologies, Inc. Performance versus Cost in a Cloud Computing Environment Yiping Ding OPNET Technologies, Inc. © 2009 OPNET Technologies, Inc. All rights reserved. OPNET and OPNET product names are trademarks of OPNET Technologies, Inc.

2. Performance vs. Cost – Macro Level The battle between performance and cost continues Same cost Better performance Same performance Less cost Better performance Less cost

3. An example of “same cost but better performance” In April 1976, the CPI was 56 and in April 2010 the CPI was 218, assuming a Base of 100 in 1982. Therefore, a cost of $666 in April of 1976 is equivalent to $2,593:

4. Exceptions… $209,644

5. An example of “better performance and less cost” ENIAC: built in 1946 and cost $500,000 (about $6 million in today’s money) iPad, costs about $500

6. What is the cost for computing and performance? Estimating the cost of obtaining a certain level of performance is not an easy task –hardware and software are purchased (licensed) and depreciate over the years –performance is predicted based on historical data, future business demands, and performance models –there are costs associated with IT staff, buildings/rooms, and utilities To get an optimal balance between cost and performance for current and future business scenarios requires significant effort – experience – performance tools –“guess and check” The current wave of cloud computing has the potential to change the situation

7. Performance vs. Cost – Micro Level Cloud computing puts a direct price tag on desired computing resources –Computing resources directly relate to cost –Computing resources are necessary but not sufficient for good performance A B C Example: an application requires a system with performance A, B, C at different times Cost with a traditional approach: Resource Cost = cost(C) x 3 Cost with cloud computing: On Demand Cost = cost(A) + cost(B) + cost(C)

8. Cloud computing and IT budgeting Whether adopting cloud computing saves money or not is up for debate From a budgeting perspective, using external cloud computing platform simplifies the process of calculating or knowing the cost Even if you don’t do the budgeting, someone will still send you a bill and you will know how much it costs Caution –Cloud computing rates are published on the vendor’s Web sites and are subject to change –Many companies provide introductory rates or even a free trial for a certain period –The “cloud” computing resembles the cloud in Mother Nature: it changes

9. What a cloud provider would say? “The idea that you don’t have to do capacity planning in the cloud is a myth. You still must plan for usage, or you might wind up getting stuck with a huge bill.” “Unfortunately, optimizing your applications to cost less on the cloud is a topic that is not well understood.” - Sriram Krishnan, Microsoft

10. Amazon EC2 and EMR pricing for N. Virginia Cost a bit more $2.00 per hour $1.00 per hour

11. An update (December 9, 2010)

12. Amazon EC2 and EMR pricing for N. California and EU – Ireland ( same as the ones for N. California ) $2.28 per hour $1.14 per hour

13. An update (December 9, 2010)

14. Hardware normalization for EC2 One EC2 Unit (EC2U) provides the equivalent CPU capacity of a 1.0-1.2 GHz 2007 Opteron or 2007 Xeon processor No change since the paper was published (today: December 9, 2010) (1.0 – 1.2 GHz) A reference config.

15. Some Quick Observations Charge by hour Location matters Pay extra for using more applications The costs are directly linked to the resources that you use but are not directly linked to the “performance” that you will get: –For “Standard On-Demand Instances” “Large” instances cost 4 times as much as “Small (Default)” instances “Extra Large” instances cost twice as much as “Large” instances –For “High Memory On-Demand Instances” “Quadruple Extra Large” instances cost twice as much as “Double Extra Large” instances –For “High CPU On-Demand Instances” “Extra Large” instances cost 4 times as much as “Medium” instances

16. Costs are proportional to hardware capacity 4 times 2 times 4 times 2 times

17. The Cost Structure for Microsoft Azure Compute –Small instance (default): $0.12 per hour –Medium instance: $0.24 per hour –Large instance: $0.48 per hour –Extra large instance: $0.96 per hour Storage –$0.15 per GB stored per month –$0.01 per 10,000 storage transactions Content Delivery Network (CDN) –$0.15 per GB for data transfers from European and North American locations –$0.20 per GB for data transfers from other locations –$0.01 per 10,000 transactions

18. Different “hardware” configurations that support Windows Azure Compute Instance Size

19. Comparing two cost structures Windows Azure: Small: $0.12 per hour Medium: $0.24 per hour Large: $0.48 per hour Extra large: $0.96 per hour Amazon EC2: Small: $0.085 per hour Large: $0.34 per hour Extra large: $0.68 per hour *1 EC2U: 1.0-1.2 GHz Opteron * 2007 Xeon processor

20. To buy or to rent (cloud computing) It is comparing Apples with Oranges… To buy: Apple’s Mac Pro with 2.66GHz Quad-Core Intel Xeon “Nehalem” processor, 3GB of memory, and 640GB of hard disk space –Cost: $2500 To rent (Amazon EC2): –Cost: 17 cents per hour, or $1489 per year if you run the machine continuously for the whole year To rent (Microsoft Azure): –Cost: 24 cents per hour, or $2102 per year. It costs 29% more than that of Amazon EC2 with two EC2 Compute Units, the Azure’s clock speed is 25% higher than Amazon EC2 X 2 If you do a lot of computations and are likely to use a physical box for more than 2 years, then it makes more sense to buy one.

21. Other costs in a cloud environment Network bandwidth / IO – pay for the usage Storage – accumulative cost Example: –Buying 2 TB external USB 2.0 Hard Drive for $150 –Equivalent to the cost of storing 1 TB of data at Amazon for a month without adding the data transfer and other costs

22. Amazon’s pricing for storage related resources and activities

23. To buy or to rent storage space? Let x be the GB of additional storage space that you use/add each month. Let’s also assume that you will use the hard drive for n months. Then the total cost (in dollars) after n months,, is Scenario I: Assume that you are going to use the 2 TB Hard Drive for three years (36 months). We also assume that after three years, you will use ¾ of 2 TB Hard Drive space (1500 GB). That is x*n =1500, and x = 1500 / n = 1500 / 36 = 41.7GB of storage space you will add each month. Therefore, the total cost of using the Amazon cloud storage space after three years is Scenario II: Assume that you only use/add about x = 1 GB of storage space each month. Then after three years, the total cost would be

24. Summary Cloud Computing is a cost driven platform by design Cloud computing will never be free and each month you will get a bill whether you like it or budget for it or not Like clouds in Mother Nature, clouds in computing are not very transparent What you don’t know may cost you and cost you automatically © 2009 OPNET Technologies, Inc. All rights reserved. OPNET and OPNET product names are trademarks of OPNET Technologies, Inc.