As the world's premier provider of cloud computing services, Amazon Web Services (AWS) offers over 200 feature-rich services with various pricing models. This wide array of services can leave UAE SMBs and Startups perplexed when attempting to comprehend all AWS server costs attached to their options.
Utilising AWS allows you to run an assortment of applications and personalise them to suit your specific requirements. Whether your business necessitates a simple platform for running business applications or a more intricate solution, AWS likely possesses a service that aligns with your needs.
AWS Server Pricing Options: A Closer Look
AWS offers a multitude of Elastic Compute Cloud (EC2) pricing methods, as well as some discount options. It is essential to understand the many pricing options on offer, what qualifies for each method and how they may apply to your business needs.
If you are new to AWS, kick-starting your journey with AWS Free Tier is an excellent idea. This option gives you direct access to over 100 products via three methods - free trials, 12 months free and always free.
AWS Free Tier Explained
The 12-months-free option provides new users with services they can utilise for up to one year post-registration. This includes services such as 750 hours per month of Amazon EC2 capacity and 5 gigabytes (GB) of Amazon S3 storage.
Always-free services are available to any AWS user. Examples include 1 million monthly AWS Lambda requests and 25 GB of Amazon DynamoDB storage.
Once you gain a better understanding of the AWS platform and its products and services, you can review AWS server pricing in a more sophisticated way for your projected needs. Each AWS pricing model provides distinct benefits and drawbacks. Ensure that whatever you choose matches the pricing, commitment and flexibility you are comfortable with.
1. On-Demand Instances
On-demand pricing is AWS's default pricing model. This model eliminates the need for long-term commitments or upfront payments. Instead, you only pay for computing capacity based on your usage. On-demand instances also offer flexibility, as you won't have to determine how many instances you'll need, and you can adjust capacity as needed.
However, this model comes with the highest price point. Therefore, limit its usage to applications that cannot be interrupted or those with unpredictable workloads.
2. Reserved Instances
Reserved instances (RI) can offer a significant discount (up to 72%, according to AWS) compared to on-demand instances. But, they require you to forecast the level of resources you'll need in the future. With RI, you commit to terms of one to three years based on your usage forecast. In return, you'll receive a discount on your hourly usage charges.
3. Spot Instances
EC2 spot instances are provided via bidding based on spare computing capacity in AWS. Set a maximum bid price, and if a spot price falls below your bid limit, the instance will be launched. As long as the bid price is above the current spot price, the instance will continue to run.
While spot instances can offer savings of up to 90% compared to on-demand pricing, the actual bids fluctuate based on available supply and demand. It's also worth noting that if the spot prices rise above your maximum price, AWS may terminate your instance with only a two-minute notice.
4. Dedicated Hosts
Dedicated hosts are physical servers dedicated to running your EC2 instances exclusively. The prime advantage of having an exclusive server is that it helps you meet compliance or regulatory requirements. With this service, you can also use your eligible software licenses from third-party vendors on Amazon EC2.
5. Savings Plans
Savings plans are another flexible pricing model that offers discounts based on a commitment to a consistent amount of usage, measured in dollars per hour, for a one- or three-year term.
While it may seem similar to RI, a key difference is that RI is based on a commitment to use instances at a set price over a specific period, while savings plans are based on a commitment to spend a specified dollar amount per hour over a period.
Identifying the Optimum AWS Server Pricing
The first step to identifying your best AWS pricing options is to comprehend your needs. What are the minimum specifications your application requires? How much traffic do you expect? What are your availability requirements? Knowing the answers to these questions will help you determine which instance type will best fit your needs and how many instances you'll need.
Once you understand your needs, you can begin to research and compare the pricing of the different instance types. Look at the specific features offered by each instance type. For example, some instances have higher storage capacity or better network performance than others. These features influence the overall cost of running your application, and the importance of any given feature depends on your business needs.
After you've considered your needs and reviewed the available features, you can determine what's most important to you -- keeping in mind your budget, of course. Some applications need more storage services, CPU power or RAM. It all depends on how you'll be using your server.
AWS offers a pricing calculator to help you determine the best AWS server pricing. While it's a useful tool that allows you to input your specific needs and compare the prices of different instance types, there are limitations to its functionality.
5 Strategies for Cost Saving
Even after finding the best AWS server pricing, there are still opportunities to optimize your processes and save money. Here are a few tips on how you can enhance your processes and reduce your EC2 costs.
Address Underutilized Instances
Identifying and addressing low-utilization instances is one of the simplest and most effective ways to save money on your AWS bill. Tools such as AWS Cost Explorer Resource Optimization can provide reports of idle or low-utilization EC2 instances.
Leverage Spot Instances
Spot instances can be a cost-effective solution for workloads that can tolerate disruptions, such as batch processing. Because they are based on bids for spare capacity, you can save a substantial amount of money compared to on-demand instances.
Utilize Auto Scaling
Auto Scaling is a service that automatically adjusts the capacity of your AWS resources to meet the demands of your application, ensuring that your application always has the right amount of resources available. Auto Scaling saves you time so you don't have to manually scale your infrastructure.
Transfer or Sell Underused RIs
If you have underutilized RIs, you can transfer them to another project or application where they can be used. AWS also has a marketplace where you can sell RIs to recoup costs and reduce your overall spend.
Assess and Optimize Your Storage
It's important to review your AWS storage setup for cost-saving opportunities regularly. For example, Amazon S3 Analytics can analyze storage access patterns and make cost-reduction recommendations.
The Role and Value of AWS
Choosing the right AWS options for your business can be daunting, given all the services and pricing models. But with the right tools, knowledge and support, you can develop an AWS pricing and cost optimization strategy that drives long-term success.
As you become more experienced and familiar with the platform and its products and services, you can analyze your usage and needs. Explore different pricing models to find the best fit -- or combination -- for your business. Each AWS server pricing model has its own advantages and disadvantages, and the deciding factors will be your business requirements and use cases.
Find out how Heline, an AWS Services Partner, can help UAE SMBs and Startups reduce your AWS costs by up to 5% today.
