The business world is slowly making the transformation from buying and owning their own servers to renting the processing power over the internet.
Cloud servers are easier to operate, more secure and much cheaper. See this comparison between a typical Dell server and a cloud server on Amazon Web Services.
But businesses using cloud servers can save more money by “switching off” the server when it is not required or reselling the server processing power if it’s no longer needed.
Cloud providers provide a range of measures to save money when using cloud servers. BoxFreeIT asked Simon Elisha, Amazon Web Services’ principal architect for Australia and New Zealand, for his tips to save money.
1. Mothball in the off season
Businesses buying office servers must buy enough units to cover their busiest period. The rest of the year those servers sit around collecting dust until they’re needed again.
Cloud servers can be paused when they’re not required. The server configuration is saved but the business no longer pays to operate the server. When the need arises, the server can be turned back on with the flick of a switch.
Some businesses save money by “turning off” the server when they leave the office at the end of the day and turn it back on when they walk in the door. One Melbourne company which designs digital campaigns automatically switches off up to 500 servers every night at 6pm and turns them on at 7 the next morning. The servers are also switched off over weekends.
“It’s all automated and they save a substantial amount of money on what they would be spending to provide that business infrastructure,” Elisha says.
Projects or seasonal work such as running the spring racing carnival or end of year sales are good examples of cases where a server might be used only occasionally. A server setup can be “mothballed” until the same time next year at no cost to the business.
While the above case more commonly applies to web applications such as e-commerce or registrations, local applications can also benefit. Businesses which have end-of-month processing can switch on more servers to handle the extra load and switch them off afterwards.
2. Buy the size that fits
Businesses buying servers for their office have to guess how much power they require beforehand. If they guess too high then they will pay more for a larger server than is necessary. Guess too low and the business might be held up by a slow-performing application.
Cloud servers can change size on the fly and the business will only pay for what they need. Analysing power consumption can help a business choose the best size for the best price, Elisha says.
“Maybe you assumed you would need a server with 8GB RAM and two CPUs and maybe you can get away with 3GB RAM and 1 CPU. Optimising your use case is a really good strategy,” Elisha says.
Cloud providers usually have an online calculator that can work out how much a server will cost depending on its memory, CPU and other settings.
Once businesses have watched how much of the server’s capacity they use they can reserve time on Amazon’s servers at a lower price. Customers buying these “reserved instances” are charged a higher upfront fee but a lower hourly rate than on-demand instances.
3. Wax and wane with the seasons
A server rarely operates at a constant speed. It uses more energy and processing power during hours of high demand. As mentioned above, businesses buying office servers have to buy servers that cover the highest demand and wear the expense of an underperforming server during lulls.
Businesses using cloud services can match their spending almost exactly to the demand curve through a process called auto-scaling. A business can grow or shrink the number of servers required for a particular task automatically in line with demand.
This process is called autoscaling and is very common with websites. Some businesses will operate four web servers during daytime business hours and fall back to two web servers at night.
“By doing this in an automated fashion then I avoid the pressure of managing that capacity,” Elisha says. “You’re saving money because you’re shedding the load when you don’t actually need it.”
4. Sell what you don’t use
If a business no longer has a need for an office server there is very little they can do with it. The market for second-hand office servers is practically non-existent because few business owners want to run essential applications on a server with an unknown history.
But the reverse is true in the cloud. Amazon has a marketplace for customers to resell their reserved instances. Resold instances perform exactly the same as new ones.
Market rules apply. Customers can sell for whatever price they can get or hold on until they get the price they want.
“It means you can recoup your investment and monetise that capacity you’re no longer using,” Elisha says. “Customers like to use this because it gives them that flexibility. Even when they are making a reservation and a commitment they can on-sell that commitment to other customers and monetise that if it no longer fits their requirement.”
Currently sellers must have a US bank account, although this will change soon, Elisha says. There are no restrictions on buyers.
Reservations are made by different Amazon regions and prices vary according to the amount of demand in that region.
5. Buy on the spot, pay less
The price a business pays for an office server is the best it can negotiate during the sale. Businesses using cloud servers can negotiate for lowest-priced servers according to what cloud providers have available.
Amazon sells excess server capacity at prices lower than its advertised rates through its spot instance marketplace. If a Windows Server typically costs 30 cents per hour a spot instance could sell for 15 cents per hour.
A user can put in a bid and buy the instance which works exactly the same as other instances. However, the instance is terminated as soon as the market price exceeds the user’s bid price.
Common scenarios include video transcoding where the video is stored on Amazon’s S3 cloud storage service and the video processed by the cheapest spot instances available. Or a database sitting on S3 could be processed with an application using spot instances.
“It’s really handy for batch type workloads, even development and test workloads that are easily recreatable,” Elisah says. “It’s a great way to save money.”
These ways to save money using cloud servers only relate to operations. Businesses using cloud servers also don’t need to pay the electricity bill that comes with operating your own office server.
Cloud servers are not for every scenario. They depend on a reliable internet connection, although many businesses in capital cities should have very quick access speeds as cloud providers including Rackspace and Amazon have opened up local data centres.