At first glance, the Amazon EC2 pricing model may look extremely complicated, but this post should make things as clear and as simple as possible.
Excluding the free tier, the AWS pricing system is typically a sum of the following configurations: machine type, data transfer, block storage, additional software, and finally, optional services.
Firstly, you will want to decide how machines (called instances) you need, as well as long and how often you need them running in AWS.
- On-Demand Instance – this is the simple hourly rate model. You choose your region and an instance or machine type, then pay for as long as you use it. AWS will keep this instance active until you decide to stop it. This is most useful if you need a machine to maintain uptime, but not necessarily for a long, sustained period.
- Reserved Instance – as the name implies, you reserve an instance or instances to run for a specific amount of time. By reserving and paying up ahead of time, you can save up to 75% of the price. This instance is good for long-term projects that require committed machines, and can save you a good amount of money in the long run.
- Spot Instance – this tier provides another cheaper alternative to on-demand tiers, wherein you make a bid on the spot market for instances. Once the price falls below your bid, the instance activates. The drawback is that AWS can bring the machine down in the event spot prices rise above your maximum bid price. This is most useful for machines that do not need to be up 24/7 for an extended period, and can also save you money.
Do you need to store data on your instance? Then the block store option is for you. The pricing is per GB per month, with the option for better performance and backup. AWS has two kinds, so choose what will best suit your needs:
- Instance storage, which disappears the moment the machine is taken down. Be careful when using this with spot pricing.
- EBS storage, which persists even after the machine goes offline and thus can be used for another instance.
As mentioned before, you can also add and manage the software of your instances. The hourly fee is included in your EC2 rate. You can find more information about what software you can download at the Amazon EC2 user guide.
The amount of bandwidth you use also has a price. Any inbound transfers from the internet are free. Data transfers coming in and out from other AWS services within the same availability zone are also free (unless from a public IP). Finally, outbound transfers carry a charge, and how much depends on the amount of GB being transferred monthly.
You may avail of optional services like Amazon CloudWatch, which monitors your instances, or Elastic Load Balancing, which charges per hour and per GB.
Estimating and managing costs is just one piece of the puzzle in developing your cloud strategy. You will also want to consider what kind of infrastructure you will need to support your data center. If you need help creating the right cloud environment for your enterprise, contact a PolarSeven cloud expert today.
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