AWS : Costs and Pricing

Key concepts

Cost structure [Source]

Managing cloud spend is one of the major challenges facing experienced IT organizations today. We must be able to do the following taks in a best way.

• Cloud Costs
• Service Pricing
• Cost Management
• Cost Optimization and Monitoring

To do the tasks above we have the following possibilities in aws:

• Simple Monthly Calculator – allows you to explore AWS services, model solutions, and create estimates for the cost of your use cases on AWS
• TCO Calculator – used to compare the cost of running your applications in an on-premises or colocation environment to AWS
• AWS Pricing Calculator (NEW- replaces the Simple Monthly Calculator)

AWS Pricing

An accurate cost estimation that meets and exceeds your organization’s budgetary goals requires you to ask important questions, interpret data, and implement AWS best practices [Source].

Term	Definition
11 9’s guarantee	99.999999999% durability of objects over a given year. This durability level corresponds to an average annual expected loss of 0.000000001% of objects
AWS Support	Paid support plans offering AWS customers access to AWS technical experts and professional guidance
Durability	The probability that the object will remain intact and accessible after a period of one year
Fault Tolerance	The property that enables a system to continue operating properly in the event of the failure of (or one or more faults within) some of its components
High Availability	Refers to systems that are durable and likely to operate continuously without failure for a long time
Memory-Optimized	The R3 instance class recommended for applications that require high memory performance
Storage-Optimized	Instances are designed for workloads that require high, sequential read and write access to very large data sets on local storage. They are optimized to deliver tens of thousands of low-latency, random I/O operations per second (IOPS) to applications

Paid AWS Cloud Services

• Running Compute Resources
• Storage
• Provisioned Databases
• Data Transfer

you only pay for services you use, and once you stop using them, AWS stops charging you immediately and doesn’t levy any termination fees.

AWS does not charge for

• AWS Elastic Beanstalk – Rapid application deployment
• AWS Cloud Formation – AWS Branded Infrastructure as Code service
• Auto-Scaling – Scaling EC2 instances up/down or in/out based on your application requirements
• AWS IAM – User and access management

There is no cost for uploading data into the AWS cloud, although you will pay for storage and data transfer back out. Because of the massive scale of the AWS technology platform, there is no limit to how much data you can upload.

Good Cost Hygiene Practices

• Establish a naming convention for Servers and Databases
• Use Tags to track costs by:
  • Group
  • Lifecycle
  • Person
  • Application
• Create IT Governance rules
• Set Billing Alarms

Costs In Regions

Term	Definition
Availability Zones	A logical data center in an AWS region with redundant and separate power, networking and connectivity reducing the likelihood of two zones failing simultaneously
AWS CloudFront	Fast content delivery network (CDN) service that securely delivers data, videos, applications, and APIs to customers globally with low latency
AWS Local Zones	A type of AWS infrastructure deployment that places AWS compute, storage, database, and other select services closer to large population, industry, and IT centers where no AWS Region exists today
AWS Regions	A geographical location with a collection of availability zones physically isolated from and independent of every other region
Edge Location	A physical site that CloudFront uses to cache copies of your content for faster delivery to users at any location
Points of Presence	AWS Edge Locations and Regional Edge Caches used for both AWS CloudFront and Lambda@Edge to deliver content to end users at high speeds
VPC Peering	A networking connection between two AWS VPCs that allows you to route traffic between them using private IP addresses
VPC Sharing	allows you to share subnets with other AWS accounts in your organization

Key Points

• AWS costs depend on the region
• Costs vary due to:
  • local regulations
  • cost of doing business
  • competition
• Least costly region is US East 1 in N. Virginia

Tips for Reducing Costs

• Use AWS CloudFront to cache data close to end users
• Avoid inter-region data transfer costs
• Peering via AWS Transit Gateway for VPCs reduces costs