Cost management

Question 1

What is meant by the term capital expenses (CapEx)?

Answer 1

The money spent on long-term assets like buildings and equipment. Centered around depreciation- how long will an asset last? Predicting future needs is difficult!

Question 2

What is meant by the term operational expenses (OpEx)?

Answer 2

The money spent for the on-going running of business costs. Usually considered variable expenses. You only buy what you need e.g. cloud computing

Question 3

What is the main problem with CapEx?

Answer 3

If demand outpaces capacity then you may end up purchasing on-off equipment for a premium.

Question 4

What are the 4 cost optimisation strategies?

Answer 4

1) Appropriate provisioning
2) Right sizing
3) Purchase options
4) Geographic selection

Question 5

What is appropriate provisioning?

Answer 5

When you only provision what is required and nothing more. Consolidate where possible for greater density and lower complexity e.g. 4 small DynamoDBs –> 1 large DynamoDB

Question 6

What is right sizing?

Answer 6

Use the lowest cost resource that still meets the technical specifications. Architecting for the most consistent use of resources is best versus spikes and valleys. Use a loosely coupled architecture here.

Question 7

What is purchase options?

Answer 7

Consider using reserved instances for permanent application needs. You may use a combination of these such as a mix of on-demand, spot and RIs

Question 8

What is geographic selection?

Answer 8

The concept that AWS pricing can vary depending on the region you select. for example, certain regions may be cheaper.

Question 9

What are soft costs?

Answer 9

The costs associated with provisioning and running, installing a system e.g. training…

Question 10

What should you consider to reduce soft costs?

Answer 10

Using managed services will reduce soft costs

Question 11

How can you optimise/reduce data transfer costs?

Answer 11

Data going in and out between AWS regions can become a significant cost. consider using AWS Direct Connect to give cost-effectiveness at large volumes

Question 12

What is the number one thing you can use to help manage you AWS assets?

Answer 12

Tag, tag, tag

Question 13

What can a tag strategy be used to manage?

Answer 13

cost allocation, security, automation etc..

Question 14

What is are AWS resource groups?

Answer 14

a grouping of AWS assets defined by their tags. They can be used to provide consolidated metrics, alarms and config details for a given tag

Question 15

What is an reserved instance?

Answer 15

Where you purchase or agree to purchase an instance in advance for a significant discount

Question 16

How does billing work with RIs?

Answer 16

The discounts are automatically applied when you launch and instance that matches your purchased RI

Question 17

What are the 3 RI types?

Answer 17

1) standard
2) convertible
3) scheduled

Question 18

Can you share RIs across multiple accounts with consolidated billing?

Answer 18

Yes

Question 19

with the convertible RI type, which instance features can you change?

Answer 19

Instance family, OS, tenancy options…

Question 20

What do you need to define when selecting a RI? (4 point)

Answer 20

1) The instance type- CPU, memory, networking capability
2) The platform- Linux, windows…
3) Tenancy- shared or dedicated tenancy
4) The AZ (optional)

Question 21

If an AZ is specified for an RI what is the RI called?

Answer 21

A zonal RI

Question 22

What is a regional RI?

Answer 22

When a RI is created and no AZ is specified. You get a discount, but the AZ is not guaranteed to be available

Question 23

Can you change a Zonal RI to a regional RI?

Answer 23

Yes, via the console or API

Question 24

What is a spot instance?

Answer 24

A way to purchase excess EC2 capacity that AWS has on an exchange basis. You define a price you are willing to pay for that instance and you can get outbid is someone is willing to pay more.

Question 25

What are the 3 types of spot instances you can request?

Answer 25

1) one-time/Fill and kill- if out-bid instance is killed and data is lost (ephemeral)
2) maintain- can be configured to terminate, stop or hibernate until the price point can be met again
3) duration based- set amount of time to run

Question 26

What is a dedicated instance?

Answer 26

A virtualised instance on hardware just for you. You may share hardware with dedicated instances in the same account.

Question 27

Which type of instance types are available when using a dedicated instance?

Answer 27

1) on-demand
2) RI
3) spot

Question 28

What is a dedicated host?

Answer 28

A physical server dedicated to you.

Question 29

Which instance types are available on a dedicated host?

Answer 29

on-demand or dedicated host reservation

Question 30

When you you use a dedicated host?

Answer 30

When you have server-bound software which uses per-core, per-socket pricing.

Question 31

Name and describe 3 cost management tools?

Answer 31

1) AWS budgets- allows you to set pre-defined limits and notifications when nearing a budget.
2) Consolidated billing- Enables single pater account that is locked down to those that need access. Allows you to bring in economies of scale using tiering pricing to save money
3) Trust advisor- Runs service checks on your resource and proposes suggested improvements and cost optimisation.

Question 32

Which two services can be used to most directly help with the right-sizing of your landscape?

Answer 32

1) AWS CloudWatch

2) AWS TrustedAdvisor

Question 33

Is purchasing a direct use of tagging?

Answer 33

Nope!