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How AWS Pricing Works AWS Whitepaper
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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
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How AWS Pricing Works AWS Whitepaper
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.
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.
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.
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.
• 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.
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 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
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 5
How AWS Pricing Works AWS Whitepaper
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.
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.
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
Conductor to automatically resize the Amazon EC2 instances (based on the recommendations
report from Cost Explorer).
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.
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 8
How AWS Pricing Works AWS Whitepaper
Topics
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.
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.
Data backup Daily Amazon EBS snapshots One Amazon EBS volume
per instance with 30 GB of
storage per volume
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.
The following example shows an Outpost deployment with distributed Amazon EKS service
extending to on-premises environments.
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).
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
example represents a set of parameters highlighting facility, networking, and power requirements
needed for location validation (selected parameter: example value):
Term: 3 Years
Number of Racks: 1
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).
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.
• c5.24xlarge, 11 TB
• $7,148.67 monthly;
• 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
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.
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How AWS Pricing Works AWS Whitepaper
Contributors
Contributors to this document include:
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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.
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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
services are provided “as is” without warranties, representations, or conditions of any kind, whether
express or implied. The responsibilities and liabilities of AWS to its customers are controlled by
AWS agreements, and this document is not part of, nor does it modify, any agreement between
AWS and its customers.
© 2023 Amazon Web Services, Inc. or its affiliates. All rights reserved.
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