AWS offers multiple flexible pricing models that help you optimize cost, remain agile, and align cloud usage with business needs.
AWS Pricing Models
| Pricing Model | Description | Use Case Examples |
|---|
| Pay as You Go | Pay only for the resources you use. Start, stop, and scale on demand. | EC2 on-demand instances, Lambda functions |
| Save When You Reserve | Commit to 1 or 3 years for a predictable budget and cost savings. | EC2 Reserved Instances, RDS, DynamoDB, Redshift |
| Pay Less by Using More | Volume-based discounts as usage increases. | S3 storage tiers, data transfer |
| AWS Cost Reductions | AWS regularly passes on infrastructure cost savings to customers. | Continuous price drops over time |
1. AWS Free Tier
When you create a new AWS account, you receive $200 in credits and access to free services.
| Plan Type | Duration / Limits | Details |
|---|
| Free Plan | 6 months or until $200 credits are used | No charges, account deleted after expiration |
| Paid Plan | Charged after $200 credits are consumed | Account remains active after credits end |
| Always Free Services | Ongoing free limits each month | Example: Lambda, DynamoDB, S3 |
Examples of Always Free Services
| Service | Free Tier Benefits |
|---|
| Lambda | 1M requests/month, 400,000 GB-seconds compute |
| DynamoDB | 25 GB storage, 200M requests/month |
2. Compute Service Pricing
01. Amazon EC2
- Only charged for what you use.
- Number of instances, configuration,elb runing time and data processed.
- Detialed monitoring via Cloudwatch
| Model | Description | Billing | Discount | Other |
|---|
| On-Demand | Pay for compute capacity by the second | Per second (Linux/Windows) | — | Min 60 sec |
| Reserved Instances | Commit 1–3 years | Hourly | Up to 75% | All, partial, no upfront charges |
| Spot Instances | Bid on unused capacity | Hourly | Up to 90% | Can loose anytime |
| Dedicated Hosts | Physical servers dedicated to your use | On-Demand / Reserved | — | |
| Savings Plans | Flexible pricing alternative to RIs | 1 or 3 years | Up to 72% | |
💡 Tip: Use private IPs between instances to save on networking costs.
02. AWS Lambda
- Pay per request and duration × memory allocated.
Amazon ECS / Fargate
| Launch Type | Pricing Basis |
|---|
| EC2 Launch Type | Pay for EC2 instances used |
| Fargate Launch Type | Pay per container CPU and memory usage |
03. Storage Service Pricing
1. Amazon S3
| Factor | Pricing Basis |
|---|
| Storage Class | Standard, IA, One-Zone IA, Intelligent Tiering, Glacier, Glacier Deep Archive |
| Storage Volume | Tiered pricing — pay less as you store more |
| Requests | Charges for PUT, GET, COPY, etc. |
| Data Transfer | Free inbound, pay for outbound |
| Lifecycle Transitions | Charged per transition between storage classes |
| Transfer Acceleration | Additional cost |
2. Amazon EBS
- Based on volume type and size.
- IOPS
| Factor | Pricing Basis |
|---|
| Volume Type & Size | Provisioned GBs per month |
| IOPS | Charged if provisioned IOPS |
| Snapshots | Per GB stored per month |
| Data Transfer | Free inbound, outbound tiered |
Amazon EFS
- Pay per GB-month of storage used.
- Supports Infrequent Access Tier and Lifecycle Management.
04. Database Pricing
01. Amazon RDS
- Per hour billing
- Database characteristics: Engine, Size, Memory class
- Purchase Types: On Demand, Reserved(1-3 years)
| Component | Pricing Basis |
|---|
| Compute (DB Instance) | On-Demand or Reserved (1–3 years) |
| Storage | Provisioned EBS volume (per GB-month) |
| Backups | Free up to total DB storage size |
| I/O Requests | Charged per million requests |
| Deployment Type | Single-AZ or Multi-AZ (double cost) |
| Data Transfer | Free inbound, outbound tiered |
05. Content Delivery Pricing
Amazon CloudFront
| Cost Component | Details |
|---|
| Data Transfer Out | Varies by region (e.g., Americas, Europe, Asia) |
| Requests | Pay per 10,000 or 1 million requests |
| Data Transfer In | Free(out is chraged) |
| Aggregated Discounts | Volume discounts across all edge locations |
06. Networking Costs
| Scenario | Cost per GB | Notes |
|---|
| Inbound traffic to EC2 | Free | — |
| Between EC2 (same AZ, private IP) | Free | Use private IPs |
| Between EC2 (different AZ, private IP) | $0.01 | Within same region |
| Between EC2 (different / same AZ, public IP) | $0.02 | Avoid public IPs |
| Between regions (Inter-Region) | $0.02 | Per GB transfer |
💡 Tip:
- Prefer private IPs over public IPs for cost savings.
- Using a single AZ reduces cost but impacts high availability.
9. Summary
| Category | Key Principle |
|---|
| Compute | Choose between On-Demand, Reserved, Spot, or Savings Plans |
| Storage | Pay for provisioned size and data transfer out |
| Database | Combine On-Demand or Reserved pricing with backup/storage tiers |
| Networking | Optimize data transfer using private IPs and same AZ |
| Free Tier | Utilize Always Free and credit-based offers for testing |