AWS Pricing: 5 Models & Pricing for 10 Popular AWS Services

When it comes to cloud solutions, Amazon Web Services has the most complete set. Each one has been designed to meet a specific business need or goal.

However, it’s important to take into account the cost of employing these tools to understand what you’re spending and whether you’re getting value for your money.

Amazon knows their customers have different budgets and usage levels, so they created various pricing plans to meet everyone’s needs. In this article, we will look at the various pricing models and more.

How Amazon Web Services Pricing Works

Although AWS service pricing appears to be a little perplexing, it follows the best SaaS pricing principles. The Amazon Web Services business strategy is based on the SaaS business model, which means you can use pre-built cloud solutions and only get to pay for the use to achieve your business goals.

There are five AWS pricing models to select from, depending on your business needs.

But before that, let’s look at the pricing principles those models are built on.

The Principles of AWS Pricing

1. Pay As You Go.

Pay-as-you-go is an AWS pricing principle that allows you to rent resources as needed. With this model, you can run as many machines as you want for as long as you want. On-demand infrastructure can, however, quickly add up to a lot of money, especially for long-term server deployments.

2. Use More, Pay Less.

Amazon offers bulk discounts and tiered pricing for most services. So, for example, the more storage you use, the lower prices you’ll get to pay.

3. Save When You Reserve

This option allows you to set aside compute capacity for a long time (1 to 3 years). You will receive a huge discount ranging from 30% to 72% on the overall price of the allocated capacity in exchange for your long-term commitment.

However, even if you do not use all of the allotted capacity, you are still obligated to pay the entire price.

4. Free Usage Tier

AWS offers new clients the chance to try out a variety of services for free for a year or until they exceed their quota. With Amazon Simple Storage Service, you can get 750 hours of servers (EC2) or 5 GB of storage (Amazon S3).

5 AWS Pricing Models

AWS offers five pricing models to help you save money and plan your budget based on unique use cases. When planning your AWS project, you can utilize one or more of these models.

1. On-Demand Model

This model is built on the pay-as-you-go principle, allowing you to pay by the hour or by the second.

You can create instances without having to pay for anything upfront, and swiftly cancel these instances when necessary, and you’ll only be charged based on the resources you utilized.

It offers a high level of flexibility and scalability, making it suitable for new AWS users who want to test the waters or for unpredictable workloads. On-demand instances, on the other hand, are more expensive and can quickly add up.

Pros

You are not obligated to sign a long-term contract.

It’s useful if you anticipate that your cloud workload may fluctuate.

It’s very flexible.

Cons

Your options for saving are restricted.

You may soon run out of money, and despite its flexibility, it may end up being very expensive in the long run.

2. Spot Instances Model

This is an intriguing pricing strategy, as it allows you to request extra computer capacity and utilize it essentially for free. It offers the most cost-saving possibilities, especially if you need to scale quickly, and is available at up to 90% off the on-demand price.

However, this is a complicated way to do things, and it can be hard to use for some fault-sensitive applications because your instance could be shut down at any time.

When AWS needs the computational power, a spot instance can be canceled, with only a two-minute warning.

Pros

It’s the most cost-effective model.

The model is appropriate for fault-tolerant activities, such as CI/CD or web servers.

Cons

Adhering to this strategy can be difficult, especially if you’re new to cloud administration.

Your instance could be shut down at any given time.

3. Reserved Instances

The reserved instances model is comparable to the spot instances but comes with more stability. It allows you to use a requested instance, but you wouldn’t need to request it every time you need it. Instead you can reserve it for a long period (between 1 to 3 years), paying for it irrespective of how much you use it.

Reserved Instances (RIs) price gives substantial savings in exchange for committing to using AWS for a long time—1 or 3 years. AWS provides numerous payment options for RIs, including no upfront payment, partial upfront payment, and full upfront payment. When compared to spot instances, it is easier to set up and maintain RIs.

However, even if you do not use all of the capacity, you will be charged for all reserved instances.

Pros

You know what your charges will be.

You can get up to 72% in savings with this model.

Its more user-friendly when compared to Spot Instances.

Cons

You must commit to long-term pricing.

You must pay for the reserved instances regardless of how often you use it.

4. Savings Plans

With this plan, you’ll be required to select the computing capacity you’ll need (measured per hour with fixed rates), and commit to it immediately for a period of one to three years. To put it another way, this model is a better version of the on-demand strategy.

AWS Saving Plans, like RIs, provide a substantial reduction in exchange for committing to using AWS resources for a longer length of time. Savings plans, on the other hand, allow you to commit to an hourly spend and then apply a discount rate that is deducted from your on-demand usage. Because they are pooled across resources, you can get multiple discounts on your AWS account at the same time.

Pros

It’s the simplest model to start and continue with.

You can budget for your costs.

Cons

You must commit to a long-term payment.

If you use more resources than you selected, you’ll be charged on a demand basis.

5. Dedicated Hosts

Physical servers, also known as Dedicated Hosts, are available for rent on AWS. This model is considered highly safe and trustworthy as it gives you an entire server to yourself. You don’t have to do any administrative work when you rent a dedicated host. The hardware is cleaned and maintained by AWS. Dedicated hosts, on the other hand, are more expensive and are typically within the budget of businesses.

Images Source: Eg Innovations

10 Amazon Services And Their Charges

There are numerous Amazon services out there. Here are a breakdown 10 popular AWS services and the factors affecting their pricing.

Amazon Elastic Compute Cloud (EC2): Compute instance types, Time the instance is run and operating system.
Amazon Elastic Container Service (ECS): charges are for vCPUs and GB.
Amazon Elastic Container Registry: Storage, data transfer in, data transfer out.
Amazon Lightsail: storage, transfers, operating system.
AWS Batch: You pay for the resources you use like AWS Lambda functions, EC2 instances or AWS Fargate.
Amazon Fargate: Storage and duration, the number of virtual CPUs used.
Amazon Lambda: number severless functions and the number of times it runs.
Amazon Elastic Kubernetes Service (EKS): charged for each Amazon EKS cluster
Amazon Elastic Block Storage (EBS): Amount of storge used and the duration(GB-month), Type of EBS volume.
Amazon Elastic Map/Reduce (EMR): pricing is based on additional charges on top of the regular EC2 price.

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