General AWS Pricing Practices
Remember that the general concept of pricing in AWS follows the utility company model. Furthermore, AWS pricing is based on these general concepts:
Pay as you go: AWS allows you to pay as you go, without excessive long-term commitments. This ensures adaptability and helps eliminate CapEx costs for IT.
Pay less when you reserve: You can use reserved EC2 instances or Savings Plan instances to save as much as 72% over On-Demand Instances. These pricing models for EC2 are covered in the next section.
Pay even less per unit by using more: Services like S3 and EC2 offer volume discounts as your AWS infrastructure grows.
Pay even less as AWS grows: AWS is constantly learning how to host the cloud more efficiently; as it saves costs, AWS passes its savings on to you.
If yours is a very large enterprise, realize that AWS can also offer custom pricing models. This might be required if you have a very large-volume project and the standard pricing model would appear to be cost-prohibitive.
Also, remember that you can start with the Free Tier of service. Keep in mind that some services of AWS, including these, can remain free (given certain service levels):
VPC
CloudFormation
IAM
Auto Scaling
It is important to understand the general cost categories of AWS:
Compute
Storage
Data transfers out (aggregated across services)
In general, there are no charges for the following:
Data transfers in
Data transfers between AWS services
A number of variables go into the pricing of the different fundamental services. Here are some to give you a feel for your ability to control costs:
EC2: Total clock hours of usage, amount and distribution of load balancing, machine configuration, detailed monitoring, machine purchase type, software/OS, elastic IP addresses, number of instances (including those created by Auto Scaling), and cross-AZ data transfer
S3: Storage type, storage class, requests, and data transfer out
EBS: Volume type, IOPS, and snapshots
RDS: Total clock hours of usage, additional storage, database configuration, purchase type, deployment type, number of databases, data transfer out, and provisioned storage
CloudFormation: Traffic distribution location, requests and data transfer out
Fundamentals of Compute Pricing
For some organizations, compute makes up a vast amount of the total expenditure when it comes to AWS costs. It is little surprise, therefore, that over the decades of its operation, AWS has added more and more flexible pricing models when it comes to compute costs. In this section, we cover the various models.