Domain 4: Billing and Pricing

Pricing Models for AWS

On-Demand Instances

Pay for compute capacity per hour or per second with no long-term commitments or upfront payments.

Best Fit Scenarios:

• Short term, spiky, or unpredictable workloads that cannot be interrupted.

• Applications being developed or tested for the first time on AWS.

Reserved Instances (RIs)

Provides significant discount (up to 75%) compared to On-Demand and capacity reservation.

Best Fit Scenarios:

• Steady-state usage applications.

• Applications requiring reserved capacity.

• Users able to make upfront payments to reduce their computing costs.

RI Flexibility:

Offers instances types that can be modified during the RI term.

RI Behavior in AWS Organizations:

RIs can provide discounted hourly rates to member accounts of an organization.

Spot Instances

Allows you to bid on spare Amazon EC2 computing capacity for up to 90% off the On-Demand price.

Best Fit Scenarios:

• Suitable for applications with flexible start and end times.

• Applications feasible at very low compute prices.

• Users with urgent need for large amounts of additional computing capacity.

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Account Structures and Billing

Consolidated Billing in AWS Organizations:

• Allows centralizing payment methods for multiple AWS accounts. Each account can operate independently, but bills are consolidated.

Allocating Costs Across Departments:

• Multiple Accounts: By setting up multiple accounts under an AWS organization, costs can be easily allocated and tracked per department or project.

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Resources for Billing Support

Getting Billing Support and Information:

• Cost Explorer: Visualize and manage AWS costs and usage over time.

• AWS Cost and Usage Report: Comprehensive breakdown of costs incurred by AWS services.

• Amazon QuickSight: A business analytics tool to visualize your billing reports.

• Third-party Partners & AWS Marketplace Tools: Tools like CloudHealth and CloudCheckr.

• Open a Billing Support Case: Through the AWS Management Console.

• Concierge for AWS Enterprise Support Plan Customers: Dedicated technical advisors to guide through AWS infrastructure, best practices, and architecture.

Finding Pricing Information:

• AWS Simple Monthly Calculator: Estimate your monthly AWS bill.

• AWS Services Product Pages: Directly on the AWS website for each service.

• AWS Pricing API: Extract AWS price lists across services programmatically.

Other Notable Features:

• Alarms/Alerts: Using Amazon CloudWatch, you can set up billing alerts to notify you when charges exceed a threshold.

• Tags in Cost Allocation: Assign metadata to AWS resources, allowing easy categorization and subsequently, easier cost allocation based on these tags.

AWS Cost Explorer's Forecasted Costs

AWS Cost Explorer is a tool provided by Amazon that helps users visualize, understand, and manage their AWS costs and usage over time. One of its features is the ability to forecast future costs.

How It Works:

• AWS Cost Explorer uses your historical data (typically several months) to predict your future expenses. The tool employs machine learning algorithms to make these forecasts.

• The more historical data available, the more accurate the forecast will likely be.

Use Cases:

• Budget Planning: You can allocate resources for upcoming months based on predicted costs.

• Identifying Trends: If there's a sudden surge in forecasted costs, it could indicate an unintended usage pattern or resources that you might have forgotten to terminate.

• Cost Optimization: With forecasted data, you can anticipate when you'll need resources and when you can shut them down or scale them back.