Definitive Guide to AWS Pricing

The Definitive Guide to AWS Pricing

Perhaps the biggest issue with AWS that its competitors edge out on is the confusing pricing model. It does promise the capacity to help users save significantly on funds that otherwise by avoiding spending on unnecessary resources, but getting to that point isn’t always clear. We will be covering in greater detail how this works.

The Fundamentals

The majority of Amazon’s services work on a pay-as-you-go model with billing depending on how much time was spent on their services and with what resources.  All points of cost are completely transparent, leaving no extraneous costs to suddenly catch users completely off guard.  Licensing and complex contracts are not necessary either, allowing the user to dive right into using the services of their choice.  When the user is done using the service, they may terminate at any time without additional charges applied.


No Overprovisioning

One of the bigger challenges is over-provisioning resources that will remain unused for some time.  Even when the maximum capacity is met, there is still a chance that the additional resources that are procured to continue meeting demand will also go unused and result in more wasted funds.  AWS’ payment model updates with more current needs as resources can be added seamlessly through the cloud.  Amazon’s cloud lets its users be as flexible as their customers require.


Savings Plans

Savings Plans is a flexible pricing model for discounted service use.  It offers savings in exchange for the dedicated use of a service for a specific amount of time over the course of a 1 or 3 year period.  This comes with recommendations, performance reporting, and budget alerts.


More is Less

AWS also offers volume-based discounts with higher resource use accounting for greater discounts.  Some services have tiered pricing where the more resources users consume, the less they have to pay per GB.  This is applied to either storage use or the frequency at which a service is used.  This way, as a company either grows in scale or needs to cope with spikes in customer activity, Amazon helps to alleviate the burden of expanding costs.


Free Trial

For those uncertain about using AWS, there is a free trial mode for certain services on offer referred to as Free Tier.  How much is available to use differs on the service type as well as different periods of time allotted to users.  Free Tier services are either offered for the first year after signup, a few months after initial activation, or are perpetually free for a certain amount before actual funding kicks in for additional resources.  We have an article covering the AWS Free Tier with more details on what services are available and for how long.

Tools to Help


To better understand how to organize the resources provided, there are visualization tools for analyzing resource expenditures with links back to specific points where those resources were expended.  These spreadsheets can further be tailored to better suit specific departments in an organization that need specific pieces of information provided in a way that’s easier for them to understand and apply.  This is more helpful for allocating respective costs instead of having resource expenditure under a singular variable with no context as to what the contributing factors to certain price hikes are.


Better Cost Control

The name of the game is still allowing management to have better access to billing information.  Along with oversight as to which customers are spending what company resources, upper management has the final say on what guardrails are in place to avoid overspending.  This control also extends to governance and security functionality with controls for permissions and access logs.


Planning and Forecasting

Amazon has invested heavily in AI technologies and applies that heavily in how they save costs with AWS. On the cloud, it is much easier to procure and deactivate resources based on rising needs without the need to physically install more resources. This does require organizations on the cloud to physically prepare for having to adopt new methods of anticipating changes in the budget. For example, traffic on a seasonal basis is something that can be predicted and can be built around. This way, it is easier to interpret a bill as having crossed the payment threshold or remaining within budgetary constraints.


Existing Price Models

AWS offers various pricing models with pre-established variables to meet physical requirements and pricing goals. These models can be adjusted based on customer needs, allowing flexibility in resource allocation. Considerations such as operating systems, instance types, availability zones, and purchase options can be fine-tuned to optimize costs while maintaining performance levels.


Pricing Calculator

To avoid being as esoteric as possible, there is a calculator on the AWS website to help predict the cost of using a service.  The pricing is very transparent as to what will cost however much, and it is fairly easy to use.  It can consider the use of multiple services and provide estimated results with individual costs of services kept separate for ease of use.  Calculated results are also easy to share by providing either a link to the results or exporting the results in the form of a .csv file.  As stated before, the calculator is on Amazon’s own website and is available to use free of charge to understand the cost before dedicating anything towards AWS.  Alternatively, there are also whitepapers, tutorial videos, and presentations that Amazon provides which all cover cost optimization on AWS here.

When determining costs for applications on the cloud, several considerations are essential to keep in mind. These considerations include understanding the specific requirements and functionalities of the application in the cloud environment. Factors such as the type of application, its workload demands, and the cloud computing services employed all play a crucial role in determining the costs associated with running the application. Additionally, optimizing pricing strategies provided by cloud service providers, like AWS, can help mitigate unexpected billing charges and ensure cost efficiency for the application’s operation in the cloud.

In addition to the pricing calculator, Amazon offers a wealth of resources such as whitepapers, tutorial videos, and presentations focused on cost optimization on AWS. These supplementary materials further enhance users’ knowledge and skills in managing cloud expenses effectively. By combining practical tools with educational resources, organizations can navigate AWS pricing complexities with confidence and achieve cost-efficient cloud operations.

Need help on AWS?

AWS Partners, such as AllCode, are trusted and recommended by Amazon Web Services to help you deliver with confidence. AllCode employs the same mission-critical best practices and services that power Amazon’s monstrous ecommerce platform.

Dolan Cleary

Dolan Cleary

I am a recent graduate from the University of Wisconsin - Stout and am now working with AllCode as a web technician. Currently working within the marketing department.

Related Articles

AWS Graviton and Arm-architecture Processors

AWS Graviton and Arm-architecture Processors

AWS launched its new batch of Arm-based processors in 2018 with AWS Graviton. It is a series of server processors designed for Amazon EC2 virtual machines. The EC2 AI instances support web servers, caching fleets, distributed data centers, and containerized microservices. Arm architecture is gradually being rolled out to handle enterprise-grade utilities at scale. Graviton instances are popular for handling intense workloads in the cloud.

What is Tiered Pricing for Software as a Service?

What is Tiered Pricing for Software as a Service?

Tiered Pricing is a method used by many companies with subscription models. SaaS companies typically offer tiered pricing plans with different services and benefits at each price point with typically increasing benefits the more a customer pays. Striking a balance between what good rates are and the price can be difficult at times.

The Most Popular Cloud Cost Optimization Tools

The Most Popular Cloud Cost Optimization Tools

Cloud environments and their pricing models can be difficult to control. Cloud computing does not offer the best visibility and it is easy to lose track of which price control factors are having an impact on your budget. Having the right tools can help put value to parts of an environment and provide guides on how to better bring budgetary issues back under control.