Module 2 - Section 1 : Fundamentals of Pricing

Summary

This video explains AWS pricing fundamentals, focusing on three main cost drivers: compute, storage, and outbound data transfer. It emphasizes AWS's utility-style pricing, where customers pay only for what they use with no long-term contracts. The video highlights how AWS offers tiered pricing for services like Amazon S3, discounts based on usage, and cost-saving opportunities through services like Amazon EC2, VPC, and auto-scaling. It also mentions AWS's free tier for new customers and the possibility of custom pricing for high-volume projects. AWS continues to lower prices, offering savings through economies of scale and improved operational efficiencies.

Takeaways

• 😀 AWS pricing is based on three core cost drivers: compute, storage, and outbound data transfer.
• 😀 Inbound data transfer and data transfer between services within the same region are free of charge.
• 😀 Outbound data transfers are aggregated across services and charged based on the outbound data transfer rate.
• 😀 AWS follows a pay-as-you-go model, meaning you only pay for what you use, with no long-term contracts or upfront payments required.
• 😀 As your AWS usage grows, you can benefit from volume-based discounts and lower costs.
• 😀 AWS lowers its pricing frequently, with 75 price reductions as of September 2019, enabling savings for users.
• 😀 AWS optimizes costs through economies of scale, allowing for cost savings as your adoption of AWS services increases.
• 😀 For AWS storage services, pricing is tiered, so you pay less per gigabyte as your usage increases.
• 😀 AWS provides various options for cost optimization, including selecting the right combination of storage solutions to meet your performance, security, and durability needs.
• 😀 AWS offers a free tier for new customers, allowing up to one year of free usage for services like EC2, S3, and EBS.
• 😀 AWS also offers additional free services such as Amazon VPC, Elastic Beanstalk, and Auto Scaling, although resource provisioning through these services may incur charges.

Q & A

What are the three fundamental drivers of cost in AWS?

The three fundamental drivers of cost in AWS are compute, storage, and outbound data transfer.

Is there any charge for inbound data transfer in AWS?

No, there is no charge for inbound data transfer in AWS. Data that you put into AWS is free.

Are there any charges for data transfer between services in the same region in AWS?

No, data transfer between services within the same region is free.

How is outbound data transfer charged in AWS?

Outbound data transfer is aggregated across services and charged at the outbound data transfer rate. The charge appears on the monthly statement as AWS data transfer out.

Does AWS require long-term contracts for using its services?

No, AWS does not require long-term contracts. You pay for what you use and can start or stop using a service at any time.

How does AWS's utility-style pricing model work?

AWS's utility-style pricing model means you pay for what you use. You pay less when you use more and pay even less as AWS grows.

What are the advantages of using AWS over building your own data center?

With AWS, you pay only for the services you consume without large upfront expenses. You also save on operational costs and do not need to dedicate resources to building costly infrastructure.

How does AWS provide volume-based discounts?

AWS offers volume-based discounts where you pay less per unit (e.g., per gigabyte) as your usage increases, benefiting from economies of scale.

What are some of the AWS storage services pricing options?

AWS offers tiered pricing for services like Amazon S3, where you pay less per gigabyte as your usage increases. AWS also provides storage options based on how frequently you access your data.

What is the AWS Free Tier, and what does it offer to new customers?

The AWS Free Tier offers new customers up to one year of free services, including a free Amazon EC2 t2.micro instance, Amazon S3 usage, and Amazon EBS storage.

Are there any charges for using services like Amazon VPC, AWS Elastic Beanstalk, or Auto Scaling?

These services are free to use, but there may be charges associated with the resources they provision, such as EC2 instances when auto-scaling is used.