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.

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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 64% reduction in TCO when compared with deploying the same resources on-premises, or in a hosted environment. The report also found a 560% 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.

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Watch how you can Reduce Cost and Maximize Efficiency on AWS

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.

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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.

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AWS Tiered Storage Pricing

Reserved Instances
Watch the AWS re:Invent 2013 session: The science behind choosing Reserved Instances

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. 

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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.

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Spot Instances
Watch Vevo, Optaros, and Tapjoy detail cost savings up to 90% off on-demand prices using Spot Instances

Learn how you can eliminate unused and idle resources by using AWS Trusted Advisor

The AWS Trusted Advisor inspects your AWS environment and makes recommendations when opportunities exist to save money by eliminating unused and idle resources or making commitments to reserved capacity.

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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.

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reInvent HA session
Watch the AWS re:Invent 2013 session: Improving Availability & Lowering Costs with Auto Scaling & Amazon EC2
AWS security
Watch the AWS re:Invent 2013 session: AWS Security

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.

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