Chapter 77: AWS Pricing Concepts
AWS Pricing Concepts
This is not just a list of prices. It is a complete mental model — the way AWS decides how much money leaves your credit card every month. If you understand these 8–10 core concepts deeply, you will:
- Never get a surprise ₹50,000–₹2 lakh bill
- Be able to predict your monthly cost within 10–15 %
- Know exactly when & how to save 40–70 %
- Sound like a senior architect when talking to founders or clients
Let’s do this slowly, like we’re sitting together with a whiteboard — step by step, with everyday Hyderabad analogies, real startup examples from Telangana in 2026, current pricing numbers (ap-south-1 / ap-south-2), and the exact traps that catch most beginners.
1. The Golden Rule — The One Sentence You Must Memorize
AWS Pricing Principle #1 (the only sentence you really need):
You pay only for what you use — but “use” includes everything you forget to turn off, every byte you transfer out, and every tiny API call you didn’t expect.
Unlike a fixed electricity bill or a rented flat where you pay the same every month whether you stay home or travel, AWS is pay-as-you-go — which is fantastic when you are small… and punishing when you are careless.
2. The 8 Core Pricing Concepts You Must Understand (2026 Reality)
Let’s go one by one — each with a Hyderabad analogy and a real example.
Concept 1 — Pay-as-you-go (by the second / request / GB)
Almost everything is billed by usage, not by subscription.
- EC2, RDS, ECS Fargate → per second (after first minute)
- Lambda → per invocation + per GB-second
- S3 → per GB stored + per 1,000 requests + per GB transferred out
- DynamoDB → per read/write request unit (or provisioned capacity)
Analogy: You don’t pay ₹500/month for an auto-rickshaw whether you ride 2 km or 200 km. You pay per kilometer + per minute waiting. AWS is the same — idle resources = idle rickshaw meter running.
Example: You leave a t4g.medium EC2 instance running in ap-south-2 for 30 days (720 hours). → ~₹1,800–2,200 bill even if the instance is doing nothing.
Concept 2 — Three Kinds of “Free” (Very Important)
| Type | Duration | What’s free every month | Expires? | Typical Hyderabad usage |
|---|---|---|---|---|
| Always Free | Forever | Small amounts of many services | Never | Students & side projects |
| 12-Month Free Tier | First 12 months after sign-up | Larger amounts of popular services | Yes | College projects, first job |
| Short-term Trials | 30–90 days | Full-featured trials of premium services | Yes | Testing paid features |
Big trap in India 2026: People only remember the 12-month tier — after 12 months only Always Free remains. Suddenly t3.micro becomes ~₹1,200/month, RDS db.t3.micro ~₹3,000–4,000/month.
Concept 3 — Regions Have Different Prices
Prices are not the same everywhere.
2026 rough comparison (EC2 t4g.medium Linux On-Demand hourly):
- ap-south-2 (Hyderabad) → ~₹2.5–2.8/hour
- ap-south-1 (Mumbai) → ~₹2.6–3.0/hour
- us-east-1 (N. Virginia) → ~₹3.2–3.5/hour
- eu-west-1 (Ireland) → ~₹3.4–3.8/hour
Rule: Always use ap-south-2 (Hyderabad) or ap-south-1 (Mumbai) for Indian users — 20–40 % cheaper than US/EU regions.
Concept 4 — Data Transfer Costs (The Silent Killer)
AWS gives you free inbound data (someone uploads to your S3, someone calls your API).
But outbound (egress) to the internet is charged.
2026 rough rates (ap-south-2):
- First 100 GB/month out → free
- Next 10 TB → ~₹6–8/GB
- After that → lower tiers
Biggest trap: CloudFront → most egress is free (because data leaves from Edge Locations) Direct S3 public URL → full egress charge
Example: Your portfolio site on S3 gets 50,000 visitors/month — each downloads 5 MB photo gallery → 250 GB egress → ~₹1,200–1,800 bill → Put CloudFront in front → almost ₹0 egress
5. Real Hyderabad Example — Typical Startup Pricing Journey (2026)
Your startup “TeluguBites” — restaurant discovery + food ordering
Month 1–3 (learning phase):
- EC2 t4g.micro (Always Free)
- S3 static site + small uploads (Always Free 5 GB)
- Lambda + DynamoDB (Always Free)
- RDS db.t4g.micro (12-month free) → Bill: ₹0–300 (only data transfer)
Month 4–12 (early production):
- Bill crosses ₹30,000 → upgrade to Business Support for Trusted Advisor
- Buy Compute Savings Plan (1-year) → 60–65 % discount on ECS Fargate & Lambda
- Use CloudFront → egress almost free → Bill: ₹40,000–80,000 (predictable)
Month 13+ (after 12-month free ends):
- RDS db.t4g.micro now ~₹4,000/month
- But Savings Plan covers most compute
- Trusted Advisor finds idle t3.medium → stopped → saves ₹2,000/month → Bill: ₹60,000–1.2 lakh (still controlled)
Summary Table — AWS Pricing Concepts Cheat Sheet (2026 – India Focus)
| Concept | Key Rule / Tip (2026) | Biggest Hyderabad Trap |
|---|---|---|
| Pay-as-you-go | You pay for everything you forget to turn off | Idle EC2/RDS in non-free tier |
| Always Free vs 12-Month Free | Always Free = forever (small) 12-Month = big but ends | Shock after 12 months |
| Region pricing | ap-south-2 (Hyderabad) cheapest & lowest latency | Using us-east-1 |
| Data transfer out | First 100 GB free, then ₹6–8/GB | Direct S3 public URLs |
| Savings Plans | 1-year commitment → 60–72 % discount | Not buying when bill > ₹50,000 |
| Support plans | Business Support pays for itself via Trusted Advisor | Staying on Basic too long |
Teacher’s final note (real talk – Hyderabad 2026):
AWS pricing is very fair — but it punishes forgetfulness and rewards discipline.
The teams that keep bills low & predictable are not the ones using the cheapest services — they are the ones who:
- Always choose ap-south-2
- Tag everything (Environment, Owner, Project)
- Check Cost Explorer weekly
- Set AWS Budgets alerts at 80 %
- Buy Savings Plans as soon as usage is predictable
Do these five things religiously and your AWS bill will stay predictable & reasonable even as you scale.
Got it? This is the “how to use AWS without getting a heart-attack bill” lesson.
Next?
- Step-by-step: Set up Cost Explorer + Budgets + tag policy in a new account?
- Deep dive: Savings Plans vs Reserved Instances — which one saves more in 2026?
- Or how to use Trusted Advisor Cost Optimization to find idle resources?
Tell me — next whiteboard ready! 🚀💰
