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The AWS Whitepaper on pricing outlines the fundamental principles of AWS cost structures, emphasizing the importance of understanding pricing models, optimizing costs, and utilizing tools like the AWS Pricing Calculator and Migration Evaluator. It provides strategies for cost optimization, including the use of Reserved Instances and Spot Instances, and highlights the flexibility of AWS services to match varying demand. The document serves as a comprehensive guide for organizations to effectively manage and reduce their cloud expenses while leveraging AWS's extensive service offerings.

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AWS notes

The AWS Whitepaper on pricing outlines the fundamental principles of AWS cost structures, emphasizing the importance of understanding pricing models, optimizing costs, and utilizing tools like the AWS Pricing Calculator and Migration Evaluator. It provides strategies for cost optimization, including the use of Reserved Instances and Spot Instances, and highlights the flexibility of AWS services to match varying demand. The document serves as a comprehensive guide for organizations to effectively manage and reduce their cloud expenses while leveraging AWS's extensive service offerings.

Uploaded by

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© © All Rights Reserved
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AWS Whitepaper

How AWS Pricing Works

Copyright © 2024 Amazon Web Services, Inc. and/or its affiliates. All rights reserved.
How AWS Pricing Works AWS Whitepaper

How AWS Pricing Works: AWS Whitepaper


Copyright © 2024 Amazon Web Services, Inc. and/or its affiliates. All rights reserved.

Amazon's trademarks and trade dress may not be used in connection with any product or service
that is not Amazon's, in any manner that is likely to cause confusion among customers, or in any
manner that disparages or discredits Amazon. All other trademarks not owned by Amazon are
the property of their respective owners, who may or may not be affiliated with, connected to, or
sponsored by Amazon.
How AWS Pricing Works AWS Whitepaper

Table of Contents
Abstract and introduction ............................................................................................................... 1
Introduction ................................................................................................................................................... 1
Are you Well-Architected? .......................................................................................................................... 1
Key principles .................................................................................................................................. 2
Understand the fundamentals of pricing ................................................................................................ 2
Start early with cost optimization ............................................................................................................ 2
Maximize the power of flexibility ............................................................................................................. 3
Use the right pricing model for the job .................................................................................................. 3
AWS Pricing/TCO Tools ................................................................................................................... 4
AWS Pricing Calculator ................................................................................................................................ 4
Migration Evaluator ...................................................................................................................................... 4
AWS Cost Optimization ................................................................................................................... 6
Choose the right pricing models ............................................................................................................... 6
Use RIs to reduce Amazon RDS, Amazon Redshift, Amazon ElastiCache, and Amazon
OpenSearch Service costs ..................................................................................................................... 6
Amazon EC2 Cost Savings ..................................................................................................................... 6
Match capacity with demand ..................................................................................................................... 6
Identify Amazon EC2 instances with low-utilization, and reduce cost by stopping or
rightsizing. ................................................................................................................................................ 6
Identify Amazon RDS and Amazon Redshift instances with low utilization and reduce cost
by stopping (RDS) and pausing (Redshift). ........................................................................................ 7
Analyze DynamoDB usage and reduce cost by leveraging AutoScaling or on-demand. ........... 7
Implement processes to identify resource waste .................................................................................. 7
Identify Amazon EBS volumes with low-utilization and reduce cost by snapshotting, then
deleting them .......................................................................................................................................... 7
Analyze Amazon S3 usage and reduce cost by leveraging lower cost storage tiers .................. 8
Review networking and reduce costs by deleting idle load balancers ......................................... 8
Cost calculation examples ............................................................................................................... 9
AWS Cloud cost calculation example ....................................................................................................... 9
Architecture .............................................................................................................................................. 9
Daily usage profile ................................................................................................................................ 10
Amazon EC2 cost breakdown ............................................................................................................. 11
Hybrid cloud cost calculation example .................................................................................................. 13
Hybrid architecture description ......................................................................................................... 13

iii
How AWS Pricing Works AWS Whitepaper

Hybrid cloud components selection ................................................................................................. 14


Hybrid cloud architecture cost breakdown ...................................................................................... 16
Conclusion ...................................................................................................................................... 18
Contributors ................................................................................................................................... 19
Further reading .............................................................................................................................. 20
AWS Glossary ................................................................................................................................. 21
Document revisions ....................................................................................................................... 22
Notices ............................................................................................................................................ 23

iv
How AWS Pricing Works AWS Whitepaper

How AWS Pricing Works


Publication date: February 24, 2023 (Document revisions)

Amazon Web Services (AWS) helps you move faster, reduce IT costs, and attain global scale through
a broad set of global compute, storage, database, analytics, application, and deployment services.
One of the main benefits of cloud services is the ability it gives you to optimize costs to match your
needs, even as those needs change over time.

Introduction
AWS has the services to help you build sophisticated applications with increased flexibility,
scalability, and reliability. Whether you're looking for compute power, database storage, content
delivery, or other functionality, with AWS you pay only for the individual services you need, for as
long as you use them, without complex licensing. AWS offers you a variety of pricing models for
over 160 cloud services. You only pay for the services you consume, and once you stop using them,
there are no additional costs or termination fees. This whitepaper provides an overview of how
AWS pricing works across some of the most widely used services. The latest pricing information for
each AWS service is available at: AWS Pricing.

Are you Well-Architected?


The AWS Well-Architected Framework helps you understand the pros and cons of the decisions
you make when building systems in the cloud. The six pillars of the Framework allow you to learn
architectural best practices for designing and operating reliable, secure, efficient, cost-effective,
and sustainable systems. Using the AWS Well-Architected Tool, available at no charge in the AWS
Management Console, you can review your workloads against these best practices by answering a
set of questions for each pillar.

For more expert guidance and best practices for your cloud architecture—reference architecture
deployments, diagrams, and whitepapers—refer to the AWS Architecture Center.

Introduction 1
How AWS Pricing Works AWS Whitepaper

Key principles
Although pricing models vary across services, it’s worthwhile to review key principles and best
practices that are broadly applicable.

Understand the fundamentals of pricing


There are three fundamental drivers of cost with AWS: compute, storage, and outbound data
transfer. These characteristics vary somewhat, depending on the AWS product and pricing model
you choose.

In most cases, there is no charge for inbound data transfer or for data transfer between other AWS
services within the same Region. There are some exceptions, so be sure to verify data transfer rates
before beginning. Outbound data transfer is aggregated across services and then charged at the
outbound data transfer rate. This charge appears on the monthly statement as AWS Data Transfer
Out. The more data you transfer, the less you pay per GB. For compute resources, you pay by the
hour or by the second from the time you launch a resource until the time you stop or terminate it,
unless you have made a reservation for which the cost is agreed upon beforehand. For data storage
and transfer, you typically pay per GB.

Except as otherwise noted, AWS prices are exclusive of applicable taxes and duties, including value-
added tax (VAT) and sales tax. For customers with a Japanese billing address, use of AWS is subject
to Japanese Consumption Tax. For more information, see Amazon Web Services Consumption Tax
FAQ.

Start early with cost optimization


The cloud allows you to trade fixed expenses (such as data centers and physical servers) for
variable expenses, and only pay for IT as you consume it. And because of the economies of scale,
the variable expenses are much lower than what you would pay to do it yourself. Whether you
started in the cloud or you are just starting your migration journey to the cloud, AWS has a set of
solutions to help you manage and optimize your spend. This includes services, tools, and resources
to organize and track cost and usage data, enhance control through consolidated billing and access
permission, enable better planning through budgeting and forecasts, and further lower cost with
resources and pricing optimizations. To learn how you can optimize and save costs today, visit
Optimize and Save your IT costs.

Understand the fundamentals of pricing 2


How AWS Pricing Works AWS Whitepaper

Maximize the power of flexibility


AWS services are priced independently and transparently, and available on-demand, so you
can choose and pay for exactly what you need. You may also choose to save money through a
reservation model. By paying for services on an as-needed basis, you can redirect your focus to
innovation and invention, reducing procurement complexity and enabling your business to be fully
elastic.

One of the key advantages of cloud-based resources is that you don’t pay for them when they’re
not running. By turning off instances you don’t use, you can reduce costs by 70 percent or more
compared to using them 24/7. This enables you to be cost efficient and, at the same time, have all
the power you need when workloads are active.

Use the right pricing model for the job


AWS offers several pricing models depending on product. These include:

• On-Demand Instances let you pay for compute or database capacity by the hour or second
(minimum of 60 seconds) depending on which instances you run, with no long-term
commitments or upfront payments.
• The Savings Plans flexible pricing model offers low prices on Amazon Elastic Compute Cloud
(Amazon EC2), Amazon SageMaker AI, AWS Lambda, and AWS Fargate usage in exchange for a
commitment to a consistent amount of usage (measured in $/hour) for a one or three-year term.
• The Spot Instance Amazon EC2 pricing mechanism lets you request spare computing capacity
with no upfront commitment and at discounted hourly rate (up to 90 percent off the on-demand
price).
• Reservations provide you with the ability to receive a greater discount (up to 75 percent) by
paying for capacity ahead of time. For more details, see the AWS Cost Optimization section.

Maximize the power of flexibility 3


How AWS Pricing Works AWS Whitepaper

AWS Pricing/TCO Tools


To get the most out of your estimates, you should have a good idea of your basic requirements.
For example, if you're going to try Amazon EC2, it might help if you know what kind of operating
system you need, what your memory requirements are, and how much I/O you need. You should
also decide whether you need storage, if you're going to run a database, and how long you intend
to use the servers. You don't need to make these decisions before generating an estimate; you can
play around with the service configuration and parameters to see which options fit your use case
and budget best. For more information about AWS service pricing, see AWS Pricing.

AWS offers free pricing and migration tools for you to use. If the workload details and services to
be used are identified, AWS Pricing Calculator can help with calculating the total cost of ownership.
Migration Evaluator helps with inventorying your existing environment, identifying workload
information, and designing and planning your AWS migration.

AWS Pricing Calculator


AWS Pricing Calculator is a web-based service that you can use to create cost estimates to suit your
AWS use cases. This service is useful both for people who have never used AWS and for those who
want to reorganize or expand their usage.

AWS Pricing Calculator allows you to explore AWS services based on your use cases and create a
cost estimate. You can model your solutions before building them, explore the price points and
calculations behind your estimate, and find the available instance types and contract terms that
meet your needs. This enables you to make informed decisions about using AWS. You can plan your
AWS costs and usage or price out setting up a new set of instances and services.

AWS Pricing Calculator is free for use and provides an estimate of your AWS fees and charges (not
including taxes). AWS Pricing Calculator provides pricing details for your information only. AWS
Pricing Calculator provides a console interface at AWS Pricing Calculator.

Migration Evaluator
Migration Evaluator (formerly TSO Logic) is a complimentary service to create data-driven business
cases for AWS Cloud planning and migration.

Creating business cases on your own can be a time-consuming process and does not always
identify the most cost-effective deployment and purchasing options. Migration Evaluator quickly

AWS Pricing Calculator 4


How AWS Pricing Works AWS Whitepaper

provides a business case to make sound AWS planning and migration decisions. With Migration
Evaluator, your organization gets access to AWS expertise, visibility into multiple cost-effective
cloud migration scenarios, and insights on reusing existing software licensing to further reduce
costs.

A business case is the first step in the AWS migration journey. Beginning with on-premises
inventory discovery, you can choose to upload exports from third-party tools or install a
complimentary agentless collector to monitor Windows, Linux, and SQL Server footprints. As
part of a white-glove experience, Migration Evaluator includes a team of program managers
and solution architects to capture your migration objective and use analytics to narrow down
the subset of migration patterns best suited to your business needs. The results are captured
in a transparent business case which aligns business and technology stakeholders to provide a
prescriptive next step in your migration journey.

Migration Evaluator service analyzes an enterprise’s compute footprint, including server


configuration, utilization, annual costs to operate, eligibility for bring-your-own-license, and
hundreds of other parameters. It then statistically models utilization patterns, matching each
workload with optimized placements in EC2 and Amazon Elastic Block Store (Amazon EBS). Finally,
it outputs a business case with a comparison of the current-state against multiple future-state
configurations showing the flexibility of AWS.

For more information, see Migration Evaluator.

Migration Evaluator 5
How AWS Pricing Works AWS Whitepaper

AWS Cost Optimization


AWS enables you to take control of cost and continuously optimize your spend, while building
modern, scalable applications to meet your needs. AWS's breadth of services and pricing options
offer the flexibility to effectively manage your costs and still keep the performance and capacity
you require. AWS is dedicated to helping customers achieve the highest savings potential. Get
started with the steps below that will have an immediate impact on your bill today.

Choose the right pricing models

Use RIs to reduce Amazon RDS, Amazon Redshift, Amazon ElastiCache,


and Amazon OpenSearch Service costs

For certain services like Amazon EC2 and Amazon RDS, you can invest in reserved capacity.

With Reserved Instances, you can save up to 72 percent over the equivalent on-demand
capacity. RIs are available in three options: All up-front (AURI), partial up-front (PURI), and no
upfront payments (NURI). Use the recommendations provided in AWS Cost Explorer RI purchase
recommendations, which is based on your Amazon RDS, Amazon Redshift, ElastiCache, and
OpenSearch Service usage.

Amazon EC2 Cost Savings

Use Amazon Spot Instances to reduce Amazon EC2 costs, use Compute Savings Plans to reduce
Amazon EC2, Fargate, and Lambda costs, and use SageMaker Savings Plans to reduce SageMaker
AI costs.

Match capacity with demand

Identify Amazon EC2 instances with low-utilization, and reduce cost by


stopping or rightsizing.

Use AWS Cost Explorer Resource Optimization to get a report of Amazon EC2 instances that are
either idle or have low utilization. You can reduce costs by either stopping or downsizing these
instances. Use AWS Instance Scheduler to automatically stop instances. Use AWS Operations

Choose the right pricing models 6


How AWS Pricing Works AWS Whitepaper

Conductor to automatically resize the Amazon EC2 instances (based on the recommendations
report from Cost Explorer).

Identify Amazon RDS and Amazon Redshift instances with low


utilization and reduce cost by stopping (RDS) and pausing (Redshift).

Use the Trusted Advisor Amazon RDS Idle DB instances check to identify DB instances which have
not had any connection over the last seven days. To reduce costs, stop these DB instances using the
automation steps described here: Implementing DB Instance Stop and Start in Amazon RDS. For
Redshift, use the Trusted Advisor Underutilized Redshift clusters check to identify clusters which
have had no connections for the last seven days, and less than 5 percent cluster wide average CPU
utilization for 99 percent of the last seven days. To reduce costs, pause these clusters using the
steps in: Lower your costs with the new pause and resume actions on Amazon Redshift.

Analyze DynamoDB usage and reduce cost by leveraging AutoScaling or


on-demand.

Analyze your DynamoDB usage by monitoring two metrics, ConsumedReadCapacityUnits and


ConsumedWriteCapacityUnits, in CloudWatch. To automatically scale (in and out) your DynamoDB
table, use the AutoScaling feature. Using the steps at Enabling DynamoDB auto scaling on existing
tables, you can enable AutoScaling on your existing tables. Alternately, you can also use the on-
demand option. This option allows you to pay-per-request for read and write requests so that you
only pay for what you use, making it easy to balance costs and performance.

Implement processes to identify resource waste

Identify Amazon EBS volumes with low-utilization and reduce cost by


snapshotting, then deleting them

Amazon EBS volumes that have very low activity (less than one IOPS per day) over a period of
seven days indicate that they are probably not in use. Identify these volumes using the Trusted
Advisor Underutilized Amazon EBS Volumes Check. To reduce costs, first snapshot the volume (in
case you need it later), then delete these volumes. You can automate the creation of snapshots
using the Amazon Data Lifecycle Manager. Follow the steps at Delete an Amazon EBS volume to
delete Amazon EBS volumes.

Identify Amazon RDS and Amazon Redshift instances with low utilization and reduce cost by stopping 7
(RDS) and pausing (Redshift).
How AWS Pricing Works AWS Whitepaper

Analyze Amazon S3 usage and reduce cost by leveraging lower cost


storage tiers
Use Amazon S3 analytics to analyze storage access patterns on the object data set for 30 days or
longer. Amazon S3 Analytics makes recommendations for leveraging S3 Infrequently Accessed (S3
IA) to reduce costs. You can automate moving these objects into a lower cost storage tier using
lifecycle policies. Alternately, you can also use S3 Intelligent-Tiering, which automatically analyzes
and moves your objects to the appropriate storage tier.

Review networking and reduce costs by deleting idle load balancers


Use the Trusted Advisor Idle Load Balancers check to get a report of load balancers that have
a RequestCount of less than 100 over the past seven days. Then use Step 8: Delete your load
balancer (optional) to delete these load balancers to reduce costs. Additionally, use the steps
provided in Using AWS Cost Explorer to analyze data transfer costs to review your data transfer
costs using Cost Explorer.

Analyze Amazon S3 usage and reduce cost by leveraging lower cost storage tiers 8
How AWS Pricing Works AWS Whitepaper

Cost calculation examples


The following sections use the AWS Pricing Calculator to provide example cost calculations for two
use cases.

Topics

• AWS Cloud cost calculation example

• Hybrid cloud cost calculation example

AWS Cloud cost calculation example


This example is a common use case of a dynamic website hosted on AWS using Amazon EC2,
Amazon EC2 Auto Scaling, and Amazon RDS. The Amazon EC2 instance runs the web and
application tiers, and Amazon EC2 Auto Scaling matches the number of instances to the traffic
load. Amazon RDS uses one DB instance for its primary storage, and this DB instance is deployed
across multiple Availability Zones.

Architecture

ELB balances traffic to the Amazon EC2 instances in an AWS Auto Scaling group, which adds
or subtracts Amazon EC2 instances to match the load. Deploying Amazon RDS across multiple
Availability Zones enhances data durability and availability. Amazon RDS provisions and maintains
a standby in a different Availability Zone for automatic failover in the event of outages, planned or
unplanned. The following illustration shows the example architecture for a dynamic website using
Amazon EC2, Amazon EC2 Auto Scaling, and security groups to enforce least-privilege access to
AWS infrastructure and selected architecture components, and one Amazon RDS database instance
across multiple Availability Zones (Multi-AZ deployment). All these components are deployed into
a single region and virtual private cloud (VPC). The VPC spans two availability zones to support
failover scenarios. Route 53 Resolver is used to manage and route requests for one hosted zone
towards the Elastic Load Balancer.

AWS Cloud cost calculation example 9


How AWS Pricing Works AWS Whitepaper

AWS Cloud deployment architecture

Daily usage profile


You can monitor daily usage for your application so that you can better estimate your costs. For
instance, you can look at the daily pattern to figure out how your application handles traffic. For
each hour, track how many hits you get on your website and how many instances are running, and
then add up the total number of hits for that day.

Hourly instance pattern = (hits per hour on website) / (number of instances)

Examine the number of Amazon EC2 instances that run each hour, and then take the average. You
can use the number of hits per day and the average number of instances for your calculations.

Daily pro#le = SUM(Hourly instance pattern) / 24

Daily usage profile 10


How AWS Pricing Works AWS Whitepaper

Amazon EC2 cost breakdown


The following table shows the characteristics for Amazon EC2 used for this dynamic site in the US
East (Northern Virginia) Region.

Characteristic Estimated Usage Description

Utilization 100% All infrastructure component


s run 24 hours per day, seven
days per week

Instance t3a.xlarge 16 GB memory, 4 vCPU

Storage Amazon EBS SSD gp2 One Amazon EBS volume


per instance with 30 GB of
storage per volume

Data backup Daily Amazon EBS snapshots One Amazon EBS volume
per instance with 30 GB of
storage per volume

Data transfer Data in: 1 TB/month 10% incremental change per


day
Data out: 1 TB/month

Instance scale 4 On average per day, there are


four instances running

Load Balancing 20 GB/hour ELB is used 24 hours per


day, seven days per week. It
processes a total of 20 GB/
hour (data in and data out)

Database MySQL, db.m5.large Multi-AZ deployment with


instance with 8 GB memory, 2 synchronous standby replica
vCPUs, 100 GB storage in a separate Availability Zone

The total cost for one month is the sum of the cost of the running services and data transfer out,
minus the AWS Free Tier discount. We calculated the total cost using the AWS Pricing Calculator.

Amazon EC2 cost breakdown 11


How AWS Pricing Works AWS Whitepaper

Table: Cost breakdown

Service Monthly Annually Configuration

ELB $87.60 $1,051.20 Number of Network


Load Balancers (one),
Processed bytes
per Network Load
Balancer (NLB) for
TCP (20 GB per hour)

Amazon EC2 $439.16 $5,269.92 Operating system


(Linux), quantity
(four), storage for
each Amazon EC2
instance (General
Purpose SSD (gp2)),
storage amount (30
GB), instance type
(t3a.xlarge )

Amazon Elastic IP $0 $0 Number of Amazon


address EC2 instances (one),
Number of EIPs per
instance (one)

Amazon RDS for $272.66 $3,271.92 Quantity (one)


MySQL db.m5.large, Storage
for each Amazon RDS
instance (General
Purpose SSD (gp2)),
storage amount (100
GB)

Amazon Route 53 $183.00 $2,196.00 Hosted Zones (1),


Number of Elastic
Network Interface

Amazon EC2 cost breakdown 12


How AWS Pricing Works AWS Whitepaper

s (2), Basic Checks


Within AWS (0)

Amazon Virtual $92.07 $1,104.84 Data transfer cost,


Private Cloud inbound (from:
(Amazon VPC) internet) 1 TB per
month, outbound
(to: internet) 1 TB per
month, intra-Region
0 TB per month

Hybrid cloud cost calculation example


This example is a hybrid cloud use case of AWS Outposts rack, deployed on-premises and
connected to AWS Cloud using AWS Direct Connect. Outposts extends the existing VPC from
the selected AWS Region to the customer data center. Selected AWS services required to run
on-premises (for example, Amazon Elastic Kubernetes Service (Amazon EKS)) are available on
Outposts inside the Outpost Availability Zone, deployed inside a separate subnet.

Hybrid architecture description

The following example shows an Outpost deployment with distributed Amazon EKS service
extending to on-premises environments.

Hybrid cloud cost calculation example 13


How AWS Pricing Works AWS Whitepaper

AWS Outpost with Amazon EKS Control Plane and Data Plane Architecture

Architecture

• The Control Plane for Amazon EKS remains in the Region, which means in the case of Amazon
EKS, the Kubernetes Primary node will stay in the Availability Zone deployed to the Region (not
on the Outposts).
• The Amazon EKS worker nodes are deployed on the Outpost, controlled by a Primary node
deployed in the Availability Zone.

Traffic Flow

• The EKS Control Plane Traffic between EKS, AWS metrics, and CloudWatch transits third-party
networks (AWS Direct Connect/AWS Site-to-Site VPN to the AWS Region).
• The Application / Data Traffic is isolated from Control plane and distributed between Outposts
and local network.
• Distribution of Amazon Machine Images (AMIs) (deployed on Outpost) is driven by central
Amazon ECR in Region; however, all images are cached locally on the Outpost.

Load Balancers

• Application Load Balancer is supported on Outpost as the only local ELB available.
• The Network Load Balancer and Classic Load Balancer stay in the Region, but targets deployed at
Outposts are supported (including Application Load Balancer).
• On-premises (inside corporate DC) Load Balancers (for example, F5 BIG IP, NetScaler) can be
deployed and routed via Local Gateway (inside AWS Outpost).

Hybrid cloud components selection

Customers can choose from a range of pre-validated Outposts configurations (Figure: Example
Outposts architecture) offering a mix of Amazon EC2 and Amazon EBS capacity designed to
meet a variety of application needs. AWS can also work with customers to create a customized
configuration designed for their unique application needs.

To identify the correct configuration, make sure to verify the deployment and operational
parameters of the selected physical location for the AWS Outpost rack installation. The following

Hybrid cloud components selection 14


How AWS Pricing Works AWS Whitepaper

example represents a set of parameters highlighting facility, networking, and power requirements
needed for location validation (selected parameter: example value):

Purchase Option: All Upfront

Term: 3 Years

Max on premises power capacity: 20kVA

Max weight: 2,500lb

Networking uplink speed: 100Gbps

Number of Racks: 1

Average Power Draw per Rack: 9.34

Constraint (power draw/weight): Power Draw

Total Outpost vCPU: 480

Total Outpost Memory: 2,496 GiB

In addition to minimum parameters, you should make deployment assumptions prior to any order
to minimize the performance and security impact on existing infrastructure (selected question:
example assumption).

Question: What is the speed of the uplink ports from your Outposts Network Devices (OND)?
Example answer: 40 or 100Gbps.

Question: How many uplinks per OND will you use to connect the AWS Outpost to your network?
Example answer: Four uplinks.

Question: How will the Outpost service link (the Outpost control plane) access AWS services?
Example answer: Service link will access AWS over a Direct Connect public VIF.

Question: Is there a firewall between Outposts and the Internet. Example answer: Yes

Considering these assumptions together with selected components will result in an architecture
with a higher granularity of detail and will influence the overall cost of a hybrid cloud deployment
(Figure AWS Outpost with Amazon EKS Control Plane and Data Plane Architecture).

Hybrid cloud components selection 15


How AWS Pricing Works AWS Whitepaper

Hybrid cloud architecture deployment example

Hybrid cloud architecture cost breakdown


Hybrid cloud costs include multiple layers and components deployed across the AWS cloud and
on-premises location. When you use AWS Managed Services on Outposts, you are charged for the
services based only on usage by instance-hour and not for the underlying Amazon EC2 instance
and Amazon EBS storage.

Breakdown of these services is showcased in next sections for a three-year term with partial
upfront, all upfront, and no upfront options (Amazon EC2 and Amazon EBS capacity). Price
includes delivery, installation, servicing, and removal at the end of term—there is no additional
charge.

Outpost rack charges (customized example)

Amazon EC2 Charges

• c5.24xlarge, 11 TB

• $7,148.67 monthly;

Hybrid cloud architecture cost breakdown 16


How AWS Pricing Works AWS Whitepaper

• $123,650.18 up front, $3,434.73 monthly


• $239,761.41 up front

• 1 m5.24xlarge, 11 TB

• $7,359.69 monthly
• $127,167.06 up front, $3,532.42 monthly
• $246,373.14 up front

• Amazon EBS
• 11 TB EBS tier is priced at $0.30/GB monthly

Hybrid cloud architecture cost breakdown 17


How AWS Pricing Works AWS Whitepaper

Conclusion
Although the number and types of services offered by AWS have increased dramatically, our
philosophy on pricing has not changed. You pay as you go, pay for what you use, pay less as
you use more, and pay even less when you reserve capacity. All of these options empower AWS
customers to choose their preferred pricing model and increase the flexibility of their cost strategy.

Projecting costs for a use case—for example, web application hosting—can be challenging because
a solution typically uses multiple features across multiple AWS products. This means there are
more factors and purchase options to consider.

The best way to estimate costs is to examine the fundamental characteristics for each AWS
product, estimate your usage for each characteristic, and then map that usage to the prices posted
on the website.

You can use the AWS Pricing Calculator to estimate your monthly bill. The calculator provides
a per- service cost breakdown, as well as an aggregate monthly estimate. You can also use the
calculator to see an estimation and breakdown of costs for common solutions.

Remember, you can get started with most AWS services at no cost using the AWS Free Tier.

18
How AWS Pricing Works AWS Whitepaper

Contributors
Contributors to this document include:

• Vladimir Baranek, Principal Partner Solution Architect, Amazon Web Services


• Senthil Arumugam, Senior Partner Solutions Architect, Amazon Web Services
• Mihir Desai, Senior Partner Solutions Architect, Amazon Web Services
• Nick Worthington, Solutions Architect, Amazon Web Services
• Marc Weiss, Solutions Architect, Amazon Web Services

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How AWS Pricing Works AWS Whitepaper

Further reading
For additional information, see:

• AWS Pricing
• AWS Pricing Calculator
• AWS Free Tier
• AWS Cloud Financial Management
• AWS Cost and Usage Reports
• AWS Cloud Economics Center

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How AWS Pricing Works AWS Whitepaper

AWS Glossary
For the latest AWS terminology, see the AWS glossary in the AWS Glossary Reference.

21
How AWS Pricing Works AWS Whitepaper

Document revisions
To be notified about updates to this whitepaper, subscribe to the RSS feed.

Change Description Date

Whitepaper updated Removed service-specific December 18, 2024


pricing, support plan
information section, and Free
Tier section.

Whitepaper updated Removed Amazon S3 Glacier August 29, 2023


Select pricing.

Whitepaper updated Updated and added service February 24, 2023


pricing details, options,
calculation, and examples.

Minor update Fix non-inclusive language. April 6, 2022

Whitepaper updated Updated and added service October 30, 2020


pricing details, options,
calculation, and examples.

Initial publication Whitepaper first published. June 1, 2018

22
How AWS Pricing Works AWS Whitepaper

Notices
Customers are responsible for making their own independent assessment of the information in
this document. This document: (a) is for informational purposes only, (b) represents current AWS
product offerings and practices, which are subject to change without notice, and (c) does not create
any commitments or assurances from AWS and its affiliates, suppliers or licensors. AWS products or
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AWS agreements, and this document is not part of, nor does it modify, any agreement between
AWS and its customers.

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