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AWS Pricing

Updated Apr 30, 2020 ·

Overview​

AWS has different ways to manage costs. You can choose pricing models, set budgets, use tags, and look for optimization opportunities.

  • Learn about pricing models
  • Plan with budgets
  • Track with tags
  • Optimize for savings

Understanding these helps you control expenses and make better use of AWS resources.

Pricing models​

AWS has flexible pricing options.

  • Pay-as-you-go with no commitments
  • Discounts for long-term commitments
  • Savings when usage increases

Each model fits different needs, letting you balance flexibility, cost, and usage patterns.

Pay-as-you-go​

This model charges you only when you use services.

  • Pay for actual usage time
  • No extra fees when stopped
  • No termination charges

For example, an EC2 instance only costs money while it is running, just like paying only for water when the tap is open.

# Start EC2 instance
aws ec2 run-instances --instance-type t2.micro --image-id ami-123456

# Stop EC2 instance
aws ec2 stop-instances --instance-ids i-123456

Expected result: You are billed only for the running duration of the instance.

This keeps costs predictable and fair since you only pay for what you use.

Save when you commit​

Long-term usage commitments reduce costs.

  • Reserved instances give discounts
  • Commit for 1 year or 3 years
  • Bigger discounts for upfront payments

For example:

  • On-demand: $734.67/month
  • 1-year: ~33% savings
  • 3-year: ~55% savings

Committing helps lower expenses, especially for workloads that run all the time.

Pay less by using more​

The more you use, the cheaper the cost per unit.

  • Discounts as storage grows
  • Larger usage unlocks lower rates
  • Example with Amazon S3
Up to 50TB:   $0.023/GB
Above 500TB:  $0.021/GB

Using more storage lowers the price per GB, helping you scale affordably.

Free Services​

The services below are free but there might be charges associated with other AWS services that are used alongside these services.

  • Amazon VPC
  • Elastic Beanstalk
  • Auto Scaling
  • AWS CloudFormation
  • AWS Identity and Access Management

Bandwidth costs​

Data transfer has different price levels depending on direction.

  • Inbound traffic is free
  • Transfer inside a region costs less
  • Outbound to internet costs the most
Same region AZ-to-AZ: lowest cost  
Region-to-region: medium cost  
Region-to-internet: highest cost

Knowing these costs helps you design systems that minimize expensive data transfers.

Total Cost of Ownership​

Total Cost of Ownership (TCO) is a financial estimate to help identify direct and indirect costs of a system. It compares costs of running an entire infrastructure environment or specific workload on-premises versus on AWS. Below are some TCO considerations:

  1. Server Costs

    • Hardware: Server, rack chassis power distribution units (PDUs), top-of-rack (TOR) switches, and maintenance
    • Software: Operating system (OS), virtualization licenses, and maintenance
    • Facilities: Space, power, and cooling

  2. Storage Costs

    • Hardware: Storage disks, storage area network (SAN) or Fibre Channel (FC) switches
    • Storage administration costs

  3. Network Costs

    • Network Hardware: Local area network (LAN) switches, load balancer bandwidth costs
    • Network administration costs

  4. IT Labor Costs

    • Server administration costs

Pricing calculator​

AWS provides a free tool for planning.

  • Create cost estimates
  • Model solutions and scenarios
  • Find savings opportunities

The AWS Pricing Calculator helps forecast expenses before you deploy, making cost planning more accurate and reliable.