I’m a huge fan of cloud computing in general and AWS in particular. But I’ve long had an instinct that the economics of the choice between self-hosted and cloud provider had more texture to it than the patently attractive sounding “10 cents an hour,” particularly as a function of demand distribution. As a case in point, Zynga has made it known that for economic reasons, they now use their own infrastructure for baseline loads and use Amazon for peaks and variable loads surrounding new game introductions.

An analysis of the load profiles

To tease out a more nuanced view of the economics, I’ve built a detailed Excel model that analyzes the relative costs and sensitivities of AWS versus self-hosted in the context of different load profiles. By “load profiles,” I mean the distribution of demand over the day/month as well as relative needs for bandwidth versus compute resources. The load profile is the key factor influencing the economic choice because it determines what resources are required and how heavily these resources are utilized.

The model provides a simple way to analyze various load profiles and allows one to skew the load between bandwidth-heavy, compute-heavy or any combination. In addition, the model presents the cost of operating 100 percent on AWS, 100 percent self-hosted as well as all hybrid mixes in between.

In a subsequent post, I will share the model and describe how you can use it for scenarios of interest to you. But for this post, I will outline some of the conclusions that I’ve derived from looking at many different scenarios. In most cases, the analysis illustrates why intuition is right (for example, that a highly variable compute load is a slam dunk for AWS). In other cases, certain high-sensitivity factors become evident and drive the economic answer. There are also cases where a hybrid infrastructure is at least worthy of consideration.

To frame an example analysis, here is the daily distribution of a typical Internet application. In the model, traffic distribution is an input from which bandwidth requirements are computed. The distribution over the day reflects the behavior of the user base (in this case, one with a high U.S. business-hour activity peak). Computing load is assumed to follow traffic according to a linear relationship, i.e. higher traffic implies higher compute load.

Note that while labor costs are included in the model, I am leaving them out of this example for simplicity. Because labor is a mostly fixed cost for each alternative, it will tend not to impact the relative comparison of the two alternatives. Rather, it will impact where the actual break-even point lies. If you use the model to examine your own situation, then of course I would recommend including the labor costs on each side.

For this example, to compute costs for Amazon, I have assumed Standard Extra Large instances and ELB load balancer for the Northern California region. The model computes the number of instances required for each hour of the day. Whenever the economics dictate it, the model applies as many AWS Reserved Instances (capacity contracts with lower variable costs) as justified and fills in with on-demand instances as required. Charges for data are computed according to the progressive pricing schedule that Amazon publishes. To compute costs for self-hosting, I assume co-location with the peak number of Std-XL-equivalent servers required, each loaded to no more than 80 percent of capacity. The costs of hardware are amortized over 36 months. Power is assumed to be included with rackspace fees. Bandwidth is assumed to be obtained on a 95th percentile price basis.

Now let’s look at a sensitivity analysis. Notice in the above example, that a bit more than half of the total cost for each alternative is for bandwidth/data transfer charges (,144 for self-hosted at /Mbps and ,900 for AWS). This is important because while Amazon pricing is fixed and published, 95th percentile pricing is highly variable and competitive

The chart above shows total costs as a function of co-location bandwidth pricing. AWS costs are independent of this and thus flat. What this chart shows is that self-hosting costs less for any bandwidth pricing under about .50 per Mbps/Month. And if you can negotiate a price as low as , you’d be saving more than 40 percent to self-host. I’ll leave discussion of the hybrid to another post.

This should provide a bit of a feel for how I’ve been conducting these analyses. Above is a visual summary of how different scenarios tend to shake out. The intuitive conclusion that the more spiky the load, the better the economics of the AWS on-demand solution is confirmed. And similarly, the flatter or less variable the load distribution, the more self-hosting appears to make sense. And if you’ve got a situation that uses a lot of bandwidth, you need to look more closely at potential self-hosted savings that could be feasible with negotiated bandwidth reductions.

Charlie Oppenheimer is a serial-CEO and currently an executive-in-residence at venture-capital firm Matrix Partners. His most recent company, Digital Fountain, was acquired by Qualcomm, and his previous company, Aptivia, was acquired by Yahoo. He blogs at stratamotion.com. 

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1. Cut the Rope: Experiments and Experiments HD (iPhone and iPad, .99 and .99 respectively)

One of the few casual titles that’s been able to challenge Angry Birds‘ App Store rule is Cut the Rope by ZeptoLab. The physics puzzler has a simple goal: cut ropes to help lead a piece of candy from one part of the screen to another, where the adorable lizard creature Om Nom waits to eat it.

Experiments is the sequel to the original Cut the Rope, and introduces 75 new levels, with more promised as updates down the road. The new game also packs a bunch of new objects that should add new dimensions of challenge to the task of feeding Om Nom. But if you’re already addicted to the original, you probably don’t need more convincing than the promise of new levels already provides. If you haven’t tried it yet, but want a game that you can pick up and play instantly, and drop just as quickly if the boss comes calling, this puzzler is a great pick.

2. Puerto Rico (iPad, .99)

Avid board game fans will likely recognize this one. Puerto Rico has long been a favorite among old-school gamers, and has racked up a number of accolades over the years to prove it. Like Settlers of Catan and other similar titles, it can be a bit overwhelming for new players, but the iPad app has the advantage of being able to provide instant help and in-app tutorials for beginners, so it’s actually way easier to pick up and play than the physical version.

Strategy fans looking for a game that will occupy and entertain up to four people (it has pass and play and local multiplayer) during the long summer nights that remain will definitely get a kick out of Puerto Rico. Plus, you can skip trying to keep track of all the little playing pieces and cards, as well as the clean-up afterwards

3. Final Fantasy Tactics: The War of the Lions (iPhone only; iPad version coming this fall, .99)

Square Enix is doing a really good job of making sure their back catalog of games is well-represented on iOS, and Thursday’s re-release of the original Final Fantasy tactical RPG is a great addition to that roster. Final Fantasy: Tactics borrows levelling and stats systems from more traditional role-playing games, but also introduces a strategic element as you control multiple characters and face groups of enemies in turn-based combat on a field of battle divided into a grid.

The game features optimized graphics for the iPhone and iPod touch, and also new touch controls that work remarkably well, considering the original was intended for use with button controls. One annoyance is that if you’re playing again after many previous play-throughs, as I am, you can’t fast-forward cut scenes, but Square Enix says that’s coming in an update.

Users might also balk at the game’s price: .99 is quite a bit higher than most App Store shoppers are used to. But if you’re new to the series, or if you just can’t get enough tactical RPG action, this is definitely worth the price tag.

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Leveling up has many benefits. Apart from getting some cash, you need to level up in order to increase your farm for just coin and can get to a number of other treats in the market. Here are three methods you can do to go forward quick.

Earn some ribbons. You can acquire ribbons by collecting stray animals, gathering or purchasing fences, and also from planting crops. Take a bit of time to look at all the various sorts of ribbons and what is required to be able to acquire them. A few can take just a few moments although others may call for a great deal of work. What you need to understand is that you’ll get big chunks of XP with each ribbon, and it is those xp that are needed in order to jump you up each level.

Purchase high ticket items for coin. Although you may not really need a greenhouse on your farm, getting this particular purchase for coin will supply you a thousand XP in 1 shot. Coin can be made a large number of approaches, thus don’t be scared to spend it. Get the coin you have received from the crops and make a few extravagant acquisitions. If you do not much like something, you can normally sell it. You’ll get to keep the experience points you got when you purchased the object to start with.

Extend your land. The more land you have, the more crops you can grow, and the extra coin you may make. Increasing your farm should be an early on goal during the game. This will give you space to keep the items you actually want while enabling lots of room in order to hold your things that will produce you some regular coin. Never make the blunder of growing without having some coin left over to be able to plant on your new space. This could cost you a day or two in the game so do budget accordingly.

Whenever you level up fast in Farmville, you will become fired up to notice that farm cash rise. You won’t have to spend it in a stupid manner on things you can get for coin. By and large, it will get more challenging to level up the further you achieve it, yet in the event that you can move upwards to the plantation sized lot it will supply you much essential space for crops and space to put those big ticket things. Don’t just forget about looking at the ribbons also when you are wanting to level up fast in Farmville.

So what is an expert anyway? Just what is it that qualifies anyone to be an expert on anything? As there aren’t any colleges that give degrees in this idiom, we will qualify any player as an expert who has the qualities noted above. So if you’ve got the knowledge or ability to play a game assuredly – and you like solving Problems, you could probably claim the rights to an expert status.

Just ensure that you guarantee your own expansion in the gaming business. Part of being an expert is admitting that there’s always more to discover and in the gaming industry, this shouldn’t ever be a tough thing to drag off. By opening yourself to new PC flying games and new game systems, you can turn every chance to play with one into a chance to learn more than what you already understand. In doing hence you may learn tons of new systems and widen your resourcefulness as a point of help to others.

You could also attempt many efforts to cooperate with others involved with PC flying games. Get away from the game and venture out into the general public so that you can meet people and debate your discoveries with others. Networking allows you the wonderful occasions to share or swap secrets, teach others, and discover a little something new at the same time. And the relationships that you build as a consequence are simply invaluable. There’s likely no better way you could get access to unknown gaming systems than to network with the best game-players around.

If you are totally dedicated toward becoming a gaming expert, mull over taking some classes in game programming. Hunt down and apprenticeship and find training sessions that are offered in both of your local area and the gaming industry in total. This is a good way to find out all anybody would ever wish to know about gaming, and its a good entrance into the gaming industry if you aren’t too silly about making a commitment to a full time gaming career.

You could also subscribe to gaming magazines, participate in online discussion boards, or join up to book clubs that target gaming material.

Take note that your status as a gaming expert might not always be admired. Powerful criticisms – whether right or wrong – come with the glory of being perceived as the “answer to everything. ” As an example, you could be defied for an opportunity that you feel you are good for, or you can experience the spew of a less-than-experienced heckler. The first rough rule is to not take refusal or spew personally. People might be envious of your position, or they may want to test you just to see how much you actually do ( or don’t ) know. The explanations behind these reactions to your assistance don’t really matter as long as you are assured about the quality and value behind your assistance. A real expert looks past these things and they continually look for methods to improve themselves.

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