D4 · Billing, pricing and support

AWS pricing models

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.

AWS pricing principles

AWS bases its pricing model on three fundamental principles that apply to nearly every service. Memorize all three for the exam.

01

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.

02

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.

03

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.

EC2 pricing models — detailed table

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

✓ Stable

Commitment

No commitment

Payment

By the hour or by the second

Estimated savings

Base price (reference)

When to use

  • • Applications with unpredictable or variable load
  • • Development and testing (start/stop as needed)
  • • Apps that run for short, discontinuous periods
  • • First time evaluating an app's requirements

When NOT to use

Stable, long-running workloads — you'll pay more than with Reserved

Reserved Instances (RI) — Standard

✓ Stable

Commitment

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

  • • Applications with steady, predictable usage (24/7)
  • • Production databases that run continuously
  • • You know exactly which instance type and region you need
  • • Workloads that will last at least 1 year

When NOT to use

If you need to change instance type often → use Convertible RIs or Savings Plans instead

Reserved Instances (RI) — Convertible

✓ Stable

Commitment

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

  • • Stable workloads that may need to change instance type in the future
  • • Environments that may evolve technologically
  • • You want the Reserved discount with more flexibility

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

✓ Stable

Commitment

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

  • • Stable workloads where you still want instance flexibility
  • • Compute Savings Plans: applies to EC2, Lambda and Fargate in any region/family
  • • EC2 Instance Savings Plans: bigger discount, tied to an instance family in a specific region
  • • Architecture modernization (Lambda, containers) while keeping discounts

When NOT to use

If you only run EC2 with a fixed configuration → Standard Reserved Instances may be cheaper

Spot Instances

⚠️ Interruptible

Commitment

No commitment

Payment

Market spot price (fluctuates with supply and demand)

Estimated savings

Up to 90% vs On-Demand

When to use

  • • Batch processing that can be interrupted and resumed
  • • Image/video rendering
  • • Big data analysis (Hadoop, Spark)
  • • HPC (High Performance Computing)
  • • CI/CD pipelines tolerant of interruptions

When NOT to use

Production databases, critical web apps, workloads that can't tolerate 2-minute interruptions

Dedicated Hosts

✓ Stable

Commitment

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

  • • Software licenses that require physical sockets or cores (BYOL: SQL Server, Windows Server, Oracle)
  • • Compliance requirements that demand dedicated hardware
  • • Visibility into the physical socket, cores, and host ID

When NOT to use

Most workloads — it's the most expensive option due to lack of sharing

Related labD4 · Billing, Pricing, and Support

Cut costs with a Compute Savings Plan

Buy a Savings Plan, committing to hourly spend in exchange for a discount off the on-demand price.

Understand the commitment-discount model of Savings Plans
Differentiate Compute Savings Plans from EC2 Instance Savings Plans

+1 more...

7 min5 steps

Dedicated Hosts vs Dedicated Instances

DimensionDedicated HostsDedicated Instances
BillingPer physical hostPer instance
Server visibilityYes — you see socket, cores, Host IDNo — hardware is invisible
BYOL (licensing)Yes — can use socket/core-based licensesLimited (no socket visibility)
Isolation100% dedicated physical serverHardware not shared with other accounts (but shared with your own other instances)
CostMore expensive (you pay for the whole host)Extra per-instance charge + per-region charge
ComplianceMaximum hardware isolationAccount-level isolation (not maximum)

AWS Free Tier

Always free

Never expire, available to all AWS customers indefinitely.

  • • Lambda: 1 million requests/month
  • • DynamoDB: 25 GB of storage
  • • CloudWatch: 10 custom metrics
  • • SNS: 1 million publishes
  • • CloudFormation: no charge for the service itself

12 months free

Available for 12 months from the date the AWS account was created.

  • • EC2: 750 hours/month of t2.micro or t3.micro
  • • S3: 5 GB of Standard storage
  • • RDS: 750 hours/month of db.t2.micro/db.t3.micro
  • • CloudFront: 50 GB of data transfer out
  • • ELB: 750 hours/month of Classic Load Balancer

Short-term trials

Free trials of specific services for a limited period.

  • • Amazon Inspector: 90 days free
  • • Amazon GuardDuty: 30 days free
  • • Amazon Macie: 30 days free
  • • AWS Security Hub: 30 days free
  • • Amazon Comprehend: 50k text units

Free Tier exam trap

The 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.

Pricing for other key services

ServiceMain pricing dimensionsImportant note
GB stored + requests (GET/PUT/POST) + data transfer outInbound transfer (upload) is FREE. Between AWS services in the same region it's also free.
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.
Instance hours + storage (GB/month) + I/O + backup overageMulti-AZ charges double for storage (two copies). Backups up to the size of the DB are free.
Amazon DynamoDBProvisioned 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.
GB transferred + HTTP/HTTPS requestsTransfer from CloudFront to users is cheaper than serving directly from S3.
Amazon EBSGB/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 transferOut 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

Data transfer costs are one of the biggest sources of surprises on an AWS bill. Memorize the rules for the exam.

Free (no charge)

  • ✓
    Inbound (ingress) to AWS: uploading data to S3, EC2, or any service from the internet is always free
  • ✓
    Same AZ with private IP: transfer between EC2 instances in the same AZ using a private IP is free
  • ✓
    S3 → CloudFront: transfer from S3 to CloudFront in the same region is free
  • ✓
    First 100 GB/month: the first 100 GB of outbound internet transfer are free each month

Charged

  • $
    Outbound (egress) to the internet: transfer from AWS to the internet is charged (varies by region, ~$0.09/GB)
  • $
    Between regions: transfer between two AWS regions is charged on both sides
  • $
    Between AZs (public or private IP, cross-AZ): a small charge ($0.01/GB) when crossing AZs in the same region
ScenarioCost
A user uploads a file to S3 (internet → AWS)✓ Free (ingress)
A user downloads a file from S3 (AWS → internet)$ 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 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 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?

Ready to test "AWS pricing models"?

Put what you learned to the test with original CLF-C02 exam questions.

Start CLF-C02 mock exam

Unlimited mock exams with the Pro plan

Log in to track your progress.