Pricing

Cost models and optimization

Fundamental Cost Drivers

  • Compute – server time billed per second/hour
    (e.g. EC2, Lambda)
  • Storage – charged per GB/month
    (e.g. S3, EBS, EFS)
  • Outbound Data Transfer – data sent out to the internet
    • Inbound data is generally free

On-Demand Pricing

  • Pay as you go
  • No commitment
  • Best for:
    • Low usage
    • Spiky / unpredictable workloads
    • Short-term testing

Reserved Instances (RIs)

Applies to:

  • EC2
  • RDS
  • EMR

Payment options:

  • All Upfront
  • Partial Upfront
  • No Upfront

EC2 Reserved Instances

  • 1 year – ~40% discount
  • 3 years – ~60% discount

RDS Reserved Instances

  • Up to 69% discount

🧠 Best for steady, predictable workloads

Savings Plans

  • Commit to consistent dollar usage
  • Automatically applies to eligible compute
  • Up to 72% discount

Types:

  • Compute Savings Plans
  • EC2 Instance Savings Plans

🧠 More flexible than RIs

Spot Instances

  • Use spare AWS capacity
  • Can be interrupted with 2-minute warning
  • Up to 90% discount

Best for:

  • Batch jobs
  • Data processing
  • Fault-tolerant workloads

Free Tier

12 Months Free

  • 750 hours of EC2
  • 5 GB of S3

Always Free

  • 1 million Lambda requests/month
  • 10 custom CloudWatch metrics

Trials

  • Short-term free usage of select services

Cost Management Tools

Pricing Calculator

https://calculator.aws/#/

  • Estimate monthly bills
  • Estimate migration costs

Cost Explorer

https://docs.aws.amazon.com/cost-management/latest/userguide/ce-what-is.html

  • Visualize and analyze spending
  • Default report:
    • Top service costs
    • Monthly forecast

AWS Budgets

https://aws.amazon.com/aws-cost-management/aws-budgets

  • Set cost or usage budgets
  • Send alerts when thresholds are exceeded

Trusted Advisor

https://aws.amazon.com/premiumsupport/technology/trusted-advisor/

  • Real-time optimization advice
  • Cost Optimization pillar:
    • Identify unused or underutilized resources

Exam Pattern Cheats

If the question mentions:

  • Lowest cost → Spot Instances
  • Predictable usage → Reserved Instances or Savings Plans
  • Flexibility → Savings Plans
  • Cost visibility → Cost Explorer / Budgets
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