AWS Pricing

Fundamental AWS Pricing Principles

Pay-As-You-Go: This is the core principle. You pay only for the individual services you consume, for as long as you use them, without any long-term contracts or upfront commitments.
Pay Less When You Reserve: For certain services like EC2 and RDS, you can invest in reserved capacity. In exchange for a 1-year or 3-year commitment, you receive a significant discount compared to on-demand pricing.
Pay Less with Volume-Based Discounts: For services like S3 and data transfer, the more you use, the less you pay per gigabyte. Usage is tiered, so you automatically pay a lower price as your usage increases.
Pay Less as AWS Grows: AWS continuously lowers the cost of cloud computing. As AWS grows, it achieves economies of scale and passes those savings back to the customer in the form of lower prices.

AWS offers free tiers to allow customers to get hands-on experience with services.

12-Month Free Tier: Upon creating a new AWS account, you get free usage of many popular services for 12 months, up to specified limits. This includes a certain number of hours for EC2, storage for S3, and database hours for RDS.
Always Free Tier: These offers do not expire after 12 months and are available to all AWS customers. They include services like AWS Lambda (up to 1 million free requests per month) and Amazon DynamoDB (25 GB of free storage).
Trials: Short-term free trials are offered for specific services, starting from the moment you activate the service.

On-Demand: You pay for compute capacity by the hour or second with no long-term commitments. Ideal for applications with short-term, spiky, or unpredictable workloads that cannot be interrupted.
Savings Plans: A flexible pricing model that offers lower prices compared to On-Demand, in exchange for a commitment to a consistent amount of usage (measured in $/hour) for a 1 or 3-year term. This applies automatically to EC2, Fargate, and Lambda usage.
Reserved Instances (RIs): Provide a significant discount (up to 72%) compared to On-Demand pricing in exchange for a 1 or 3-year commitment. RIs are best for applications with steady-state or predictable usage.
Spot Instances: Allow you to request spare EC2 computing capacity for up to 90% off the On-Demand price. Ideal for fault-tolerant, flexible workloads like big data analysis, batch jobs, and background processing. Spot Instances can be interrupted by AWS with a two-minute notice.
Dedicated Hosts: A physical EC2 server dedicated for your use. This can help you address compliance requirements and reduce costs by allowing you to use your existing server-bound software licenses.

S3 pricing is based on several components:

Storage: You pay for the amount of data you store, measured in gigabytes (GB). The price per GB varies depending on the S3 Storage Class (e.g., S3 Standard, S3 Intelligent-Tiering, S3 Glacier).
Requests and Data Retrievals: You pay for the requests made to your S3 objects and buckets (e.g., GET, PUT, COPY). For archival tiers like S3 Glacier, you also pay a per-GB retrieval fee.
Data Transfer:
- Data transfer IN to Amazon S3 from the internet is free.
- Data transfer OUT from S3 to the internet is priced per GB and varies by region.
- Data transfer between S3 buckets in different regions incurs a fee.
- Data transfer between S3 and other AWS services in the same region is generally free.
Management and Replication: You pay for using features like S3 Inventory, S3 Analytics, and Cross-Region Replication.

AWS Pricing Calculator: A web-based tool that lets you create an estimate for your AWS use case. It allows you to model your solutions before building them, explore price points, and review the calculations behind the estimate. It is for estimating future costs.
AWS Cost Explorer: A tool that lets you visualize, understand, and manage your AWS costs and usage over time. You can view historical data, forecast future costs, and identify trends and cost drivers. It is for analyzing past and current costs.
AWS Budgets: Allows you to set custom budgets that alert you when your costs or usage exceed (or are forecasted to exceed) your budgeted amount. You can set budgets based on costs, usage, or reservation utilization.
AWS Cost and Usage Report (CUR): Provides the most comprehensive set of AWS cost and usage data. The CUR lists AWS usage for each service category used by an account and its IAM users in hourly or daily line items. It can be delivered to an S3 bucket.
AWS Trusted Advisor: An online tool that provides real-time guidance to help you provision your resources following AWS best practices. The Cost Optimization check provides recommendations on how to save money (e.g., by identifying idle resources or recommending Reserved Instances).