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Pablo Rodriguez

Fundamentals Of Pricing

AWS Pricing Fundamentals

Section titled “AWS Pricing Fundamentals”

  • Three fundamental drivers of cost with AWS:

    • Compute
      • Charged per hour/second (Linux only)
      • Varies by instance type
    • Storage
      • Charged typically per GB
    • Data transfer
      • Outbound is aggregated and charged
      • Inbound has no charge (with some exceptions)
      • Charged typically per GB

  • How do you pay for AWS?

    • “Pay for what you use”
      • Pay only for services you consume
      • No large upfront expenses
      • No long-term contracts required
      • Lower variable costs
      • Quickly adapt to changing business needs
    • “Pay less when you reserve”
      • Reserved Instances (RIs) save up to 75%
      • Options:
        • All Upfront Reserved Instance (AURI) → largest discount
        • Partial Upfront Reserved Instance (PURI) → lower discounts
        • No Upfront Payments Reserved Instance (NURI) → smaller discount
    • “Pay less when you use more” (volume-based discounts)
      • Savings as usage increases
      • Tiered pricing for services like S3, EBS, EFS
      • Multiple storage services deliver lower costs based on needs
    • “Pay even less as AWS grows”
      • AWS focuses on lowering cost of doing business
      • Passes savings from economies of scale to you
      • Since 2006, AWS lowered pricing 75 times (as of September 2019)
      • Future higher-performing resources replace current ones at no extra charge

  • Custom pricing

    • Available for high-volume projects with unique requirements

  • AWS Free Tier

    • Free hands-on experience with AWS platform, products, services
    • Free for 1 year for new customers

  • Services with no charge:

    • Amazon VPC
    • AWS Identity and Access Management (IAM)
    • Consolidated Billing
    • AWS Elastic Beanstalk**
    • AWS CloudFormation**
    • Auto Scaling**
    • AWS OpsWorks
    • **Note: There might be charges for other AWS services used with these services

  • Key takeaways:

    • No charge (with some exceptions) for:
      • Inbound data transfer
      • Data transfer between services within same AWS Region
    • Pay for what you use
    • Start and stop anytime
    • No long-term contracts required
    • Some services are free, but other AWS services they provision might not be

AWS pricing philosophy focuses on pay-as-you-go with no long-term commitments, while offering discounts for reservation and volume. Costs are driven primarily by compute, storage, and outbound data transfer.