Content Domain 1: Cloud Concepts

Task Statement 1.4: Understand concepts of cloud economics

Let's get started with the fourth task statement, which is to understand concepts of cloud economics. Ensure you know how using AWS can help you shift your technical resources away from on-premises infrastructure management, such as server acquisition and maintenance, space management, cooling, and everything else that goes along with running and collating your data center requirements. We mentioned this in an earlier lesson. The AWS Well-Architected Framework has design principles and recommends you adopt the consumption model and only pay for what you consume. Stop spending money on data centers and data center operations, measure your overall efficiency, and analyze and track your cost and usage, and then use AWS-managed services to reduce the overall cost of ownership. Because remember, AWS offers a lower cost because of economies of scale. When you stop spending money on data centers and pay for what you consume, your technical resources are freed up and are available to prioritize other activities. Activities such as optimizing resource utilization, creating more efficient applications, developing better end-user experience, and more areas that will help your organization streamline operations and generate more revenue. For the exam, it is also important to understand how to operate in AWS partially but also fully because either can affect the ownership and operational cost for your organization. There are four parts of total cost of ownership, or TCO, for AWS to focus on for this exam. Operational expenses are OpEx, which are your day-to-day operating costs such as utilities, printer toner, coffee, and snacks. Capital expenses or CapEx, which are the costs associated with creating the longer-term benefits such as purchasing a building, servers, your printer that uses the toner mentioned before, and your power backups. CapEx items are generally purchased once and are expected to aid your organization for years. Labor calls for staffing an on-premises environment or data center, such as the network operation center technicians who might handle the installation, configuration, troubleshooting, and management of your servers and infrastructure, and also the impact of software licensing costs when moving or migrating to AWS. It's important that you understand how any software licenses you are currently using might be affected by a move to AWS. Can they be transferred or do they require different kinds of license? Can you forego your current license in favor of one managed by AWS? But all of these and other questions should be considered when evaluating the economics of operating in the cloud. Do you know which operations will reduce costs by moving to AWS? It's not usually a one-to-one transition. Some applications can be moved directly to AWS, but there are often additional things that need to be considered to be most economical. Do you know how to establish benchmarking and performance testing instead of focusing on provisioning for peak demand? Automation is also important and can help reduce costs. Like we mentioned in an earlier lesson, there could be a cost savings to scaling horizontally to meet your demands instead of running on premises and running at peak capacity when you're not in peak demand. Also, look at using data segmentation and targeted reporting that can also help you to reduce the scope of your compliance and save time during audits. And consider how strongly the use of managed services can help reduce your technical workload and costs for a variety of different use cases. For the exam, dive deeper into right sizing, adding automation, ensuring compliance is met and reducing that scope, and using AWS Managed Services, which are all covered in the AWS Well-Architected Framework. Exam tip. When you migrate from an on-premises environment and traditional servers to AWS, you are trading capital expenses for variable expenses. We'll be diving deeper into AWS services in Domain 3, cloud technology and services. I know I've been mentioning various service, benefits, tools and features to meet different requirements and use cases, and it is a lot to remember and understand, but as we go through this course, we will continue to identify keywords for different services and try to take the topics and concepts and build on each of them. The deeper you dive into fundamentals, the benefits of AWS and cloud economics, the more it will all make sense for the certification exam and the real world. Let's get started with our first walkthrough question.