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. Our massive economies of scale and efficiency improvements allow us to continually lower prices, and our multiple pricing models allow you to optimize costs for both variable and stable workloads.
We are constantly focused on reducing our datacenter costs, improving our operational efficiencies and lowering the cost of doing business. These optimizations and AWS’ substantial and growing economies of scale result in passing savings back to you in the form of lower pricing. Since 2006 we have lowered prices on 40 different occasions.
AWS is more cost-effective than on-premises environments in both short-term and long-term, and at scale, for both variable and steady-state workloads, while also delivering return on agility and enabling new experiences. In early 2012, 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 hosted environments. The findings also showed a 626% ROI over five years.
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 AWS bill, including On-Demand instances, Spot instances, and Reserved instances. Whether your workload is variable or stable, Reserved instances can save you up to 65% over On-Demand instances.
For storage and data transfer, AWS follows a tiered pricing model, which means that the more you use these resources, 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 that case, you pay a low upfront fee and get a significant discounted hourly rate, which results in overall savings between 25% and 65% (depending on the type of instance you reserve) 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.
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, providing potentially the most cost-effective option for obtaining compute capacity, depending on your application.
The AWS platform enables you to build fault-tolerant apps easily without any up-front capital investment. You can leverage AWS 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, and inherent security built in the AWS services to customers without charging any extra costs. Many of these advanced enterprise-grade security capabilities would often be out of reach of customers in their on-premises environments.