CLF-C02
Deep Dive
D4 accounts for 12% of the CLF-C02. Understand the fundamental AWS pricing principles, the EC2 pricing models, and how the core services are billed. The exam tests scenarios where you must pick the most cost-effective pricing model for a given situation.
Contents
AWS bases its pricing model on three fundamental principles that apply to nearly every service. Memorize all three for the exam.
Pay-as-you-go (pay for what you use)
You only pay for the resources you consume, with no upfront commitment. If you don't use a resource, you don't pay for it. This model removes the need to over-provision capacity.
Example
EC2 On-Demand: you pay by the hour or by the second while the instance is running. Stop it, and you pay $0.
Pay less when you reserve
By committing to a certain amount of usage for 1 or 3 years, you get significant discounts. The longer the commitment and the more you pay upfront, the bigger the discount.
Example
EC2 Reserved Instances: a 3-year commitment with All Upfront payment → up to 72% off the On-Demand price.
Pay less with more usage
For certain services like S3 and data transfer, the unit price drops as volume increases. The more you use, the cheaper the unit price.
Example
S3: first 50 TB/month = $0.023/GB. Next 450 TB/month = $0.022/GB. Over 500 TB/month = $0.021/GB.
This is one of the most heavily tested tables on the exam. Know the use case, the commitment, and the estimated savings of each model.
On-Demand
✓ StableCommitment
No commitment
Payment
By the hour or by the second
Estimated savings
Base price (reference)
When to use
When NOT to use
Stable, long-running workloads — you'll pay more than with Reserved
Reserved Instances (RI) — Standard
✓ StableCommitment
1 or 3 years (same instance type, family, region)
Payment
All Upfront (biggest discount), Partial Upfront, or No Upfront (monthly)
Estimated savings
Up to 72% vs On-Demand
When to use
When NOT to use
If you need to change instance type often → use Convertible RIs or Savings Plans instead
Reserved Instances (RI) — Convertible
✓ StableCommitment
1 or 3 years (can change family, OS, tenancy)
Payment
Same payment options as Standard RI
Estimated savings
Up to 54% vs On-Demand (less than Standard)
When to use
When NOT to use
If you know exactly which instance you'll use for the whole term → Standard RI gives a bigger discount
Savings Plans
✓ StableCommitment
Spend commitment ($/hour) for 1 or 3 years
Payment
Commit to a USD/hour amount (e.g. $10/hour)
Estimated savings
Up to 66% vs On-Demand
When to use
When NOT to use
If you only run EC2 with a fixed configuration → Standard Reserved Instances may be cheaper
Spot Instances
⚠️ InterruptibleCommitment
No commitment
Payment
Market spot price (fluctuates with supply and demand)
Estimated savings
Up to 90% vs On-Demand
When to use
When NOT to use
Production databases, critical web apps, workloads that can't tolerate 2-minute interruptions
Dedicated Hosts
✓ StableCommitment
1 or 3 years (or on-demand)
Payment
By the hour, per dedicated host
Estimated savings
Variable (not about price savings, but about compliance)
When to use
When NOT to use
Most workloads — it's the most expensive option due to lack of sharing
Buy a Savings Plan, committing to hourly spend in exchange for a discount off the on-demand price.
+1 more...
| Dimension | Dedicated Hosts | Dedicated Instances |
|---|---|---|
| Billing | Per physical host | Per instance |
| Server visibility | Yes — you see socket, cores, Host ID | No — hardware is invisible |
| BYOL (licensing) | Yes — can use socket/core-based licenses | Limited (no socket visibility) |
| Isolation | 100% dedicated physical server | Hardware not shared with other accounts (but shared with your own other instances) |
| Cost | More expensive (you pay for the whole host) | Extra per-instance charge + per-region charge |
| Compliance | Maximum hardware isolation | Account-level isolation (not maximum) |
Always free
Never expire, available to all AWS customers indefinitely.
12 months free
Available for 12 months from the date the AWS account was created.
Short-term trials
Free trials of specific services for a limited period.
Free Tier exam trap
The EC2 Free Tier (750 hours of t2.micro) applies per account, not per instance. If you run 2 t2.micro instances 24/7, you'll use 1,440 hours/month — the first 750 are free, the other 690 get billed. The Free Tier also expires 12 months after the account creation date.
| Service | Main pricing dimensions | Important note |
|---|---|---|
| Amazon S3 | GB stored + requests (GET/PUT/POST) + data transfer out | Inbound transfer (upload) is FREE. Between AWS services in the same region it's also free. |
| AWS Lambda | Number of requests + duration (ms × GB of memory) | Always free: 1M requests/month and 400,000 GB-seconds/month. Very cost-effective for variable workloads. |
| Amazon RDS | Instance hours + storage (GB/month) + I/O + backup overage | Multi-AZ charges double for storage (two copies). Backups up to the size of the DB are free. |
| Amazon DynamoDB | Provisioned read/write capacity (RCU/WCU) or pay-per-request (on-demand) | On-demand DynamoDB: pay per read/write request. More expensive per unit but no capacity management needed. |
| Amazon CloudFront | GB transferred + HTTP/HTTPS requests | Transfer from CloudFront to users is cheaper than serving directly from S3. |
| Amazon EBS | GB/month provisioned (you pay even if you don't use the space) | EBS is billed on PROVISIONED space, not used space. An empty 100 GB volume costs the same as a full one. |
| Data transfer | Out to the internet (charged). In to AWS (free). Between AZs in the same region (small charge). | Moving data between regions (cross-region replication) has a cost. Design architectures to minimize cross-region transfer. |
Data transfer costs are one of the biggest sources of surprises on an AWS bill. Memorize the rules for the exam.
Free (no charge)
Charged
| Scenario | Cost |
|---|---|
| A user uploads a file to S3 (internet → AWS) | ✓ Free (ingress) |
| A user downloads a file from S3 (AWS → internet) | $ Charged (~$0.09/GB after the first 100 GB) |
| EC2 in us-east-1 → EC2 in eu-west-1 | $ Charged (cross-region transfer) |
| EC2 → RDS in the same AZ (private IP) | ✓ Free |
| EC2 in AZ-A → EC2 in AZ-B (same region) | $ Small charge ($0.01/GB) |
| S3 → CloudFront (same region) | ✓ Free |
| CloudFront → end user (internet) | $ Charged (less than direct S3) |
Golden rule for the exam
Inbound to AWS = ALWAYS FREE. Outbound from AWS to the internet = charged. Design architectures that minimize egress (use CloudFront, keep processing in the same region as the data).
Capacity Reservations and RIs in Organizations
Capacity Reservations
Reserves EC2 capacity in a specific AZ with no 1-3 year commitment. Guarantees instances will be available (e.g. during high-demand periods). You pay for the reserved capacity regardless of whether you use it.
Sharing RIs in Organizations
Reserved Instances and Savings Plans are automatically shared across all accounts in an AWS Organization via Consolidated Billing. If one account isn't using its RI, another account can take advantage of it.
Did you get this topic?
Test what you just learned
A company runs a data analytics application that processes large batches of data for 6 hours a day, Monday through Friday. The processing can restart if interrupted. The company wants to minimize EC2 costs. Which pricing model is most suitable?
Put what you learned to the test with original CLF-C02 exam questions.
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