User Guide Amazon RDS Cost Comparison Calculator v2

Amazon Web Services User Guide: Amazon RDS Cost Comparison Calculator

March 2011

User Guide: Amazon RDS Cost Comparison Calculator

November 11, 2011 See for most current version.

Amazon Web Services (AWS) offers companies of all sizes an elastic, reliable, flexible, low-cost infrastructure web services platform in the cloud. Many companies have already deployed databases in the cloud while others are currently evaluating the costs and benefits of moving some or their entire database infrastructure to the cloud. To help financial decision makers quantify the direct economic benefits of cloud computing compared to traditional database infrastructure alternatives, AWS has published the Amazon RDS Cost Comparison Calculator, a basic Microsoft Excelbased, cost-comparison tool. While the Amazon RDS Cost Comparison Calculator is designed to be self-explanatory, this user guide provides a detailed explanation of the calculator's inputs, assumptions, and calculations. Current versions of both this user guide and the Amazon RDS Cost Comparison Calculator are available for free download at .

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Amazon Web Services User Guide: Amazon RDS Cost Comparison Calculator

March 2011

Amazon RDS Cost Comparison Calculator

The Amazon RDS Cost Comparison Calculator ("Calculator") uses industry data, AWS customer research, and userdefined inputs to quantify and compare the annual fully-burdened cost of owning, operating, and maintaining Database infrastructure versus the pay-for-use costs of using the Amazon Relational Database Service ("Amazon RDS"). The Calculator compares only the direct costs of Database infrastructure and ignores the many indirect economic benefits of cloud computing, including reliability, scalability, flexibility, faster time-to-market, and other cloud-oriented benefits. Decision makers are strongly encouraged to conduct a separate analysis to quantify and prioritize the economic value of these features.

In order to keep the analysis relatively simple and easy to understand, the Calculator quantifies only the most significant costs of owning and operating Database infrastructure and ignores many ancillary costs like architecture and engineering fees, cabling, real estate, IT build-out, facilities management, data center security and cost of procuring and provisioning hardware. It is therefore likely that owning and operating Database infrastructure will incur additional costs beyond those defined by the Calculator and explained in this user guide.

The Calculator is designed to be an important first step in helping a company quantify the direct economic benefits (or costs) of cloud computing. However, it should not replace a company's careful analysis and consideration of its own database infrastructure, architecture, business strategy, and cost structure. It is expected that most companies will want to customize the Calculator with their specific parameters and unique considerations. While all of the calculator's built-in default assumptions are Amazon's best estimates of average industry Database infrastructure costs, each assumption can (and should) be changed to represent the realities of each company's use case.

1.0 Annual Cost of Amazon RDS

Amazon Relational Database Service (Amazon RDS) is a web service that makes it easy to set up, operate, and scale a relational database in the cloud. It provides cost-efficient and resizable capacity while managing time-consuming database administration tasks, enabling the IT department to focus on its company's applications and business. Amazon RDS automatically patches the database software and backs up databases, storing the backups for a user-defined retention period. Amazon RDS provides the flexibility to scale the compute resources or storage capacity associated with relational database instance via a single API call or a few clicks on the AWS Management Console. In addition, Amazon RDS allows companies to easily deploy database instance across multiple Availability Zones to achieve enhanced availability and reliability for critical production deployments.

The Calculator estimates all of the major costs of using Amazon RDS, including instance hour costs, storage, administrative and data transfer costs.

1.1 Amazon RDS Instance Cost

Amazon RDS instances are billed according to actual hourly usage, rounded up to whole hours. The price per Database (DB) instance hour varies by Amazon RDS Instance type, deployment type and geographic region. Two types of Amazon RDS Instance pricing options are available a) pay On-Demand Instance hourly usage rates, b) pay a one-time fee to reserve instances (for 1 or 3 year terms) and pay reduced hourly Reserved Instance hourly usage rates.

Determining the deployment type for each DB instance is the first step in estimating the Amazon RDS instance cost. Two deployment types are available: Single-AZ and Multi-AZ. Multi-AZ deployment option provides enhanced availability and

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Amazon Web Services User Guide: Amazon RDS Cost Comparison Calculator

March 2011

data durability for database instances by synchronously replicating database updates between multiple Availability Zones1. The comparable on-site/co-location options will require twice the number of servers, independent infrastructure zones and additional administrative overhead to provide the same benefit. As the name suggests, Single-AZ deployment does not provide synchronous replication.

Determining the number of DB instances needed and the percentage of time that each instance will be used is the next step in estimating the annual Amazon RDS instance cost. On the "Main" tab of the Amazon RDS Cost Comparison Calculator, users define the number of "baseline" and "peak" DB instances required to satisfy total database demand. Baseline instances are assumed to be used for a large percentage of the year and represent the minimum base level DB instance demand, for ex: production instances that are likely to be run all through the year. Peak instances are assumed to be used for a smaller percentage of the year and represent the additional DB instances needed to satisfy peak instance demand, for ex: Read replicas spawned for shorter periods based on estimated spike in read traffic, Database instances used for development, staging or testing purposes. Estimating the average annual usage of baseline and peak instances allows the total number of Amazon RDS instance hours to be calculated. The annual usage (hours) of baseline and peak Amazon RDS instances is calculated by:

Hours of Baseline Instance Usage = No. of Baseline Instances * Hours per Year * Average Annual Usage of Baseline Instances

Hours of Peak Instance Usage = No. of Peak Instances * Hours per Year * Average Annual Usage of Peak Instances

Input No. of Baseline Instances

Average Annual Usage of Baseline Instances No. of Peak Instances

Average Annual Usage of Peak Instances Hours per Year

Description The minimum number of instances needed by the user's application(s) categorized by Amazon RDS instance type (Small, Large, Extra Large, HighMemory Extra Large, High-Memory Double Extra Large, High-Memory Quadruple Extra Large) The average percentage of time (each year) that baseline instances are utilized The additional number of on-demand DB instances (beyond the defined number of baseline instances) needed to satisfy peak demand, categorized by Amazon RDS instance type (see above) The average percentage of time (each year) that peak instances are utilized The number of hours in a year

Default Value 20 Standard Large Amazon RDS Instances

100% 0

25% 8,736

Data Source User-defined.

User-defined. User-defined.

User-defined. 24 hours x 7 days x 52 weeks per year

After determining the annual usage of baseline and peak instances, the annual cost of Amazon RDS instances (using OnDemand prices) is calculated by:

1 Availability Zones are physically separate locations with independent infrastructure engineered to be insulated from failure in other Availability Zones.

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Amazon Web Services User Guide: Amazon RDS Cost Comparison Calculator

March 2011

Annual Instance Cost (On-Demand Pricing) = (Hours of Baseline Instance Usage + Hours of Peak Instance Usage) * OnDemand Instance Price

Amazon RDS On-Demand Instance Prices

(in $USD, price per hour)

US East (N. Virginia) Region, US West (Oregon) Region

US West (N. California) Region EU (Ireland) Region,

Asia Pacific (Singapore) Region

Standard DB Instance Class Small (Default) Large Extra Large High-Memory DB Instance Class Extra Large Double Extra Large Quadruple Extra Large

Single-AZ $0.11 $0.44 $0.88

Single-AZ

$0.65 $1.30 $2.60

Multi-AZ $0.22 $0.88 $1.66

Multi-AZ

$1.30 $2.60 $5.20

Single-AZ $0.12 $0.48 $0.97

Single-AZ

$0.74 $1.48 $2.96

Multi-AZ $0.24 $0.96 $1.94

Multi-AZ

$1.44 $2.96 $5.92

Asia Pacific (Tokyo) Region

Single-AZ $0.13 $0.52 $1.04

Single-AZ

$0.78 $1.56 $3.11

Multi-AZ $0.26 $1.04 $2.08

Multi-AZ

$1.56 $3.12 $6.22

Note: Hours of Baseline Usage and Hours of Peak Usage are calculated in this section, above.

Source:

In addition to calculating the annual On-Demand instance cost, the Amazon RDS Cost Comparison Calculator also calculates the annual cost of 1 year and 3 year Reserved Instances. The Amazon RDS Cost Comparison Calculator uses reserve instance pricing for all "baseline" instance usage and on-demand pricing for all "peak" instance usage. For baseline instances (running in the U.S. East Region, 24x7x365, or 100% annual utilization), a one-year reserved instance term reduces the annual cost of Amazon RDS by 35% and a three-year reserved instance term reduces the annual cost by nearly 46%2. The annual cost of Amazon RDS (using 1 and 3 year reserved pricing) is calculated by:

Annual Instance Cost (w/ 1 Year Reserve Pricing) = Reserved Instance One-time Fees + Reserved Instance Usage + OnDemand Instance Usage, where:

Reserved Instance One-time Fees = No. of Baseline Instances * 1 Year Reserve One-Time Fee

Reserved Instance Usage = Hours of Baseline Instance Usage * Reserved Instance Usage Price

On-Demand Instance Usage = Hours of Peak Instance Usage * On-Demand RDS Instance Price

2 Steady state usage (8,736 hours per year) of an Amazon RDS standard small Linux/Unix server in the US - Northern Virginia Region costs $963.6 per year using On-Demand pricing, $630.46 using 1-year Reserved instance pricing, and $519.63 per year using 3-year Reserved Instance pricing. This represents a savings of 35% for a 1-year Reserved Instance and 46% savings for a 3-year Reserved Instance.

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Amazon Web Services User Guide: Amazon RDS Cost Comparison Calculator

March 2011

Annual Instance Cost (w/ 3 Year Reserve Pricing) = Reserved Instance One-time Fees + Reserved Instance Usage + OnDemand Instance Usage, where:

Reserved Instance One-time Fees: -PMT (cost of capital, 3, No. of Baseline Instances * 3 Year Reserve One-Time) Note: For comparison purposes, the 3 Year Reserve One-Time Fee is depreciated over 3 years. Cost of capital for a firm is the rate of return expected for the capital from debt holders and equity holders. The default value for this input is 15%3. PMT is an excel function that breaks down the upfront capital investment into equivalent annual payments considering the time value of money associated with the cost of capital. The negative sign is because the PMT function returns negative value as the payments are supposed to be cash out-flows.

Reserved Instance Usage = Hours of Baseline Usage * Reserved Instance Usage Price

On-Demand Instance Usage = Hours of Peak Instance Usage * On-Demand RDS Instance Price

Amazon RDS Reserved Instance Prices

One ?Time Fee (in $USD)

Standard Deployment

Small Large Extra Large Extra Large (High Memory) Double Extra Large (High Memory) Quadruple Extra Large (High Memory) Multi-AZ Deployment

Medium Large Extra Large Extra Large (High Memory) Double Extra Large (High Memory) Quadruple Extra Large (High Memory)

US East (N. Virginia), US West

(Oregon) Region, US West (N.

California),

EU (Ireland),

Asia Pacific (Singapore)

1 Year Term

3 Year Term

$227.50 $910 $1,820 $1,325 $2,650 $5,300

1 Year Term

$350 $1,400 $2,800 $2,000 $4,000 $8,000 3 Year Term

$455 $1,820 $3,640 $2,650 $5,300 $10,600

$700 $2,800 $5,600 $4,000 $8,000 $16,000

Asia Pacific (Tokyo)

1 Year Term 3 Year Term

$239 $956 $1,911 $1,391 $2,783 $5,565 1 Year Term

$368 $1,470 $2,940 $2,100 $4,200 $8,400 3 Year Term

$478 $1,912 $3,822 $2,782 $5,566 $11,130

$736 $2,940 $5,880 $4,200 $8,400 $16,800

3 The cost of capital for a firm depends on a number of factors including its financial risk, business risk, debt rating etc. It may be especially high for startup firms that may yet to establish a sound balance sheet.

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