Chapter 78: AWS Pricing and Billing Services
AWS Pricing and Billing Services
This is not just a price list. It is a complete financial operating system — how AWS charges you, how you can see and control what you’re spending, how to predict next month’s bill within 10–15 %, how to avoid the classic ₹50,000–₹2 lakh surprise, and how to save 40–70 % once your usage stabilizes.
Many people treat billing like “I’ll look at it later” — and then later becomes a heart-attack moment when the bill arrives.
Let me explain it like we’re sitting together with a whiteboard and a second cup of filter coffee — slow, clear, step-by-step, full of real analogies, actual 2026 Hyderabad startup examples, current numbers (ap-south-1 / ap-south-2), and the exact traps & habits that separate teams with ₹30,000 predictable bills from teams with ₹2 lakh surprises.
1. The Golden Rule — The One Sentence You Must Memorize Forever
AWS Pricing Principle #1 (the only sentence that really matters):
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 rented flat (fixed rent whether you stay home or travel) or a mobile plan (fixed ₹399 even if you use 1 GB or 100 GB), AWS is pay-as-you-go — which is beautiful when you are small… and punishing when you are careless.
2. The Three Layers of AWS Billing (How the Money Actually Leaves Your Card)
| Layer | What it tracks & charges | Typical services involved | Biggest Hyderabad trap (2026) |
|---|---|---|---|
| 1. Compute & Storage usage | Running time, storage GB, requests, IOPS, data processed | EC2, RDS, Lambda, S3, DynamoDB, EBS, EFS, Redshift | Idle EC2/RDS after free tier ends |
| 2. Data transfer (egress) | Moving data out to internet / between regions | S3 → internet, CloudFront egress, EC2 → internet | Direct S3 public URLs (high egress) |
| 3. API & management operations | Every API call, every GET/PUT/DELETE/ListObjects | CloudTrail, S3 requests, DynamoDB reads/writes, Lambda invocations | Recursive Lambda loops or bots hitting API Gateway |
3. The Core Pricing Models — How AWS Actually Bills You (2026 Numbers)
| Pricing Model | How it works (simple) | Typical services using this model | Best for (Hyderabad example) |
|---|---|---|---|
| On-Demand | Pay by the second / hour — no commitment | EC2, RDS, ECS Fargate, SageMaker endpoints | Dev/test, unpredictable traffic |
| Savings Plans | Commit to 1 or 3 years of usage — up to 72 % discount | EC2, Fargate, Lambda, SageMaker | Production workloads with steady usage |
| Reserved Instances (RI) | Commit to specific instance type & term (1 or 3 years) | EC2, RDS, Redshift | Predictable long-running instances |
| Spot Instances | Bid on spare capacity — up to 90 % cheaper, can be interrupted | EC2 Spot, ECS Spot tasks, Batch jobs | Non-critical batch jobs, ML training |
| Pay-per-request / Serverless | Pay only for actual usage (requests, duration, GB-seconds) | Lambda, DynamoDB (on-demand), Athena, Glue, Step Functions | Variable / bursty workloads |
| Data Transfer Out | First 100 GB/month free → then tiered (~₹6–8/GB in ap-south-2) | S3 → internet, EC2 → internet | Minimize egress with CloudFront |
2026 quick rule for Hyderabad startups:
- Start with On-Demand + Free Tier → safe for learning
- Move to Savings Plans as soon as monthly bill > ₹30,000–50,000 (covers 70–80 % of usage)
- Use Spot for CI/CD runners, batch jobs, ML training
- Never run production in us-east-1 or eu-west-1 — stick to ap-south-2 (cheapest & lowest latency for Indian users)
4. The Free Tier — Your Best Friend (But With Traps)
AWS Free Tier has three kinds (very important to know the difference):
| 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 |
Most important Always Free offers (still active in 2026):
- EC2: 750 hours t4g.micro or t3.micro every month
- S3: 5 GB Standard storage, 20,000 GET, 2,000 PUT
- Lambda: 1 million requests + 400,000 GB-seconds
- DynamoDB: 25 GB storage + 25 WCU/RCU
- RDS: 750 hours db.t4g.micro (Single-AZ)
Biggest trap in India 2026: People only remember the 12-month tier. After 12 months only Always Free remains → t3.micro suddenly ~₹1,200/month, RDS db.t3.micro ~₹3,000–4,000/month.
5. Real Hyderabad Startup Example — Pricing Journey
Your startup “TeluguBites” — restaurant discovery + food ordering (8 developers, 3 DevOps, 5 AWS accounts)
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: ₹0–500 (only data transfer)
Month 4–12 (early production):
- Bill crosses ₹45,000 → upgrade to Business Support (~₹12,000/month) for full Trusted Advisor
- Buy Compute Savings Plan (1-year, all-in) → 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 every resource (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! 🚀💰
