AWS helps you reduce your overall IT costs in multiple ways. With AWS you can replace your upfront capital expense with low variable cost and pay only for the resources you consume. AWS's economies of scale, and efficiency improvements, allow AWS to continually lower prices, while multiple pricing models allow you to optimize your costs for both variable and stable workloads.
"Had we not been on AWS, we would have had to raise an additional $4 million for capital expenses."
K. Young, Chief Executive Officer, Mortar
"We are probably saving about 50% of the cost we were spending with our previous dedicated provider."
Ian Gardner, Chief Executive Officer, Viocorp
"The organizations in the study selected AWS to develop, deploy, and manage their applications primarily because AWS offered the best scalability, time to market and price"
AWS is constantly focused on reducing their datacenter costs, improving operational efficiencies, and lowering the cost of doing business. These optimizations, and AWS’s economies of scale, result in passing savings back to you in the form of lower prices. Since 2006 AWS has lowered prices on 48 different occasions.
AWS is more cost-effective than on-premises environments in both the short, and long, term. To help validate these savings, AWS commissioned IDC to interview 11 organizations that deployed applications on AWS. IDC discovered that the five-year total cost of ownership (TCO) of developing, deploying, and managing critical applications in AWS delivered a 72% savings when compared with deploying the same resources on-premises, or in a hosted environment. The report also found a 626% ROI over five years.
AWS offers a simple, consistent, and transparent pay as you go pricing model, charging you only for the resources you actually consume. Moreover, with AWS there are no upfront fees, no minimum commitment, and no long-term contracts required.
Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides resizable compute capacity in the cloud. Amazon EC2 provides you several flexible pricing options that can help you significantly reduce your overall IT costs, including On-Demand Instances, Spot Instances, and Reserved Instances. Whether your workload is variable or stable, Reserved Instances can save you up to 60% over On-Demand Instances.
For storage and data transfer, AWS follows a tiered pricing model. The more storage and data transfer you use, the less you pay per gigabyte. In addition, volume discounts and custom pricing are available to customers for high volume projects with unique requirements.
For certain AWS services like EC2 and RDS, you can invest in reserved capacity. In these cases, you pay a low upfront fee and get a significantly discounted hourly rate. A Reserve Instance purchase can results in overall savings of up to 60% (depending on the type of instance you reserve and your utilization) over equivalent On-Demand capacity. Save even more (up to 99%) compared to pro-rated AWS pricing by purchasing RIs listed by 3rd Party sellers in the RI Marketplace.
Spot Instances allow you to name your own price for Amazon EC2 computing capacity. The Amazon EC2 Spot Instance pricing model complements the On-Demand and Reserved Instance pricing models, which can provides the most cost-effective option for obtaining compute capacity depending on your application.
The AWS platform enables you to easily build fault-tolerant applications without any up-front capital investment. You can leverage AWS's unique capabilities like Availability Zones (AZs) to get easy access to distributed data centers at no extra cost and Amazon S3 to get a highly durable storage infrastructure.
AWS provides a wide range of certifications and accreditations, physical and network security, data privacy, encryption, and inherent security built-in the AWS services to customers with no addtional costs. Many of these advanced security capabilities like 24/7 monitoring, and on-site security personnel would often be cost prohibitive for customers in their on-premises environments.