Your Quick Guide to AWS Pricing: What You Pay & Why

At Aligned Technology Group, we help customers navigate AWS pricing with clarity and confidence. Here’s a simple guide to how AWS pricing works—so you only pay for what you use, when you use it, and how you use it.

1. Pay-as-You-Go

AWS charges only for the services you consume. There are:

• No upfront costs

• No long-term contracts

• No termination fees

You can launch resources, pay per second or hour, and stop paying the moment you shut them down.

2. The Three Cost Drivers

Most AWS costs come from:

• Compute: Virtual machines, containers, and serverless functions.

• Storage: Object and block storage, billed by the gigabyte.

• Data Transfer: Inbound is usually free. Outbound is billed per GB and decreases in price with higher usage.

3. Four Pricing Models

Choose what fits your workload best:

• On-Demand: Pay by the hour or second with zero commitment.

• Savings Plans: Commit to consistent usage over 1 or 3 years and save up to 72%.

• Reserved Instances: Prepay for capacity at a discount.

• Spot Instances: Tap into unused capacity at a deep discount—great for flexible workloads.

4. Free Cost Tools from AWS

AWS offers helpful tools to estimate and optimize your cloud spend:

• AWS Pricing Calculator: Estimate costs before you deploy.

• Migration Evaluator: Compare your current on-prem setup to AWS.

• AWS Cost Explorer & Trusted Advisor: Monitor usage, detect waste, and get optimization tips.

5. How to Optimize Costs

Here are some easy wins:

• Shut down idle instances

• Right-size your resources

• Use auto-scaling to match demand

• Choose lower-cost storage tiers

• Delete unused load balancers and volumes

6. Real-World Examples

• Hosting a dynamic website using EC2, RDS, and Auto Scaling might cost around $1,000/month, depending on your configuration.

• Hybrid cloud setups using AWS Outposts can be modeled for both cloud and on-prem costs, with flexible pricing options for reserved and on-demand capacity.

7. Don’t Forget the AWS Free Tier

Start exploring AWS at no cost with free monthly usage across popular services like EC2, S3, Lambda, and more.

Want help building your cost model or right-sizing your environment?
Let ATG guide your cloud spend so you get performance without overspending. Download the full AWS pricing guide here.