How to calculate AWS charges? From estimating the assumptions to inputting data into the tool

When trying to calculate the cost before using Amazon Web Services (AWS), some people find themselves stuck. Estimating AWS prices is not a simple calculation; it varies depending on configuration assumptions, such as uptime, region, redundancy, storage capacity, and data transfer volume. Without clarifying these assumptions, it's difficult to determine what to enter into the AWS Pricing Calculator.

In this article, we will explain the prerequisites that should be established first when estimating AWS charges and the factors that affect the charges from a practical perspective. We will then explain the basic estimation procedure using the AWS Pricing Calculator, using major services (EC2, S3, RDS) as examples.

We will also introduce points that are likely to cause discrepancies between estimates and actual billing amounts, as well as ideas for updating estimates as you go along.

Why is calculating AWS charges difficult?

Estimating AWS costs is not simply a matter of calculating the total amount; it must be calculated based on the system configuration and operating conditions.

AWS estimates are determined by "prerequisites" rather than "calculation"

Why it doesn't end with arithmetic operations

AWS charges vary by service. For example, Amazon EC2 is uptime, Amazon S3 has storage capacity, Amazon RDS has a variety of factors that determine pricing, such as configuration and redundancy.

Therefore, rather than simply calculating "how much it will cost per month," you must first decide which services you will use and under what conditions before you can make an estimate.

A typical example of stopping without being able to determine the input value

When you open the AWS Pricing Calculator, you'll be presented with a list of input fields, such as instance type, storage capacity, data transfer volume, etc. If you don't have a clear understanding of the prerequisites, you won't be able to determine things like "how many hours it will run," "is the Tokyo region okay?", or "should I use multi-AZ?", and you won't be able to proceed with the input.

Why estimates often differ from expectations

Insufficient uptime and redundancy assumptions

The biggest reason for discrepancies between estimates and actual billing amounts is that assumptions about uptime and redundancy are not taken into account. If you calculate based on a test environment but your production environment runs 24 hours a day, or if you add a multi-AZ configuration to your availability requirements, the cost will change significantly.

Overlooking data transfer and operational costs

AWS fees are determined by more than just servers and storage. Operational costs, such as data transfer over the internet, backups, monitoring, and log storage, also add up. These costs are often omitted from initial estimates, leading to discrepancies and results in the price being "more expensive than expected."

What determines AWS pricing? Basic structure to understand before calculating

First, you need to clarify where charges are incurred. While AWS offers a large number of services, the pricing concepts are the same, and understanding the basic structure will make it easier to estimate.

Overview of AWS's billing model

Pay-as-you-go concept

AWS uses a pay-as-you-go system, where you only pay for what you use. Unlike on-premises systems, where you don't have to pay a fixed amount for the equipment, costs fluctuate depending on usage. Therefore, pricing is calculated based on the assumption of "what and how much you use."

Breakdown of "amount used"

AWS fees are not a single service fee, but are made up of multiple components. For example, even when setting up a server, storage and network usage will be incurred in addition to the computational processing itself. When making an estimate, it is essential to break down these components.

Key factors affecting pricing

Compute

Amazon Computing resources such as EC2 and AWS Lambda are often the main components of billing. Costs vary greatly depending on the instance type, operating time, and number of instances. The difference is particularly noticeable depending on whether the resources are used 24 hours a day or only during business hours.

storage

Amazon S3 and Amazon The cost of storage such as EBS varies depending not only on the storage capacity but also on the frequency of access and storage class. Please note that backups and snapshots also add to storage costs.

data transfer

Network costs are often overlooked when it comes to AWS fees. While communication within AWS is free, charges are incurred for sending data to the Internet and transferring data across regions. Depending on your configuration, these costs may be higher than expected.

Option/operational costs

Monitoring ( Amazon Costs also include operational services such as CloudWatch, log storage, backups, and automation settings. While these are often omitted in initial estimates, they are factors that cannot be ignored in production operations.

Prerequisites to consider before calculating AWS charges

The most important thing when estimating AWS fees is to clarify the assumptions before using the tool. The numbers you enter into the Pricing Calculator only have meaning once the configuration and operational assumptions have been determined. If you calculate without clarifying these points, the estimate will likely differ from reality.

System Configuration Assumptions

Scope of services available

The first thing you need to decide is which service to use. Amazon Is it only EC2? Amazon Does it include RDS? Amazon The pricing structure will change depending on whether you use CloudFront. The estimate is calculated on a per-service basis, so you will need to first determine the scope of your usage.

Redundancy (single AZ/multi-AZ)

Costs vary greatly depending on availability requirements. The number of instances and data replication costs will vary depending on whether you operate in a single AZ or use a multi-AZ configuration as a disaster prevention measure. Since redundancy is often a prerequisite in production environments, you should make this decision at an early stage.

Distinguishing between development, testing, and production

Even with the same configuration, the cost approach differs depending on the environment's purpose. A testing environment is started only when necessary, whereas a production environment is assumed to be running at all times. If you do not clearly state which environment is being targeted in your estimate, the assumptions regarding operating time and number of units will be incorrect.

Assumptions regarding operating conditions

Operating hours (regular/business hours)

The biggest difference in price is the operating hours. The monthly cost will vary greatly depending on whether you run the system 24 hours a day, 365 days a year, or only during business hours. The first step in getting a realistic estimate is to decide on your operating pattern.

Monitoring and backup

Monitoring and backups cannot be omitted in production operations. Amazon CloudWatch metric collection, log storage, RDS automatic backups, etc. will incur additional costs. It is important to include the minimum necessary operating costs in your initial estimates.

Estimated future increase/decrease

AWS costs fluctuate depending on usage. If you estimate without taking into account increases in the number of users, expansion of data capacity, and increases in access, your assumptions will soon become unreliable once operations begin. In the early stages, it is more important to understand the points at which increases and decreases will occur than to make precise predictions.

How to calculate fees using the AWS Pricing Calculator

Next, we'll enter the information into the AWS Pricing Calculator, AWS's official pricing tool, to estimate the cost. It's important to note that the Calculator is not a "magic tool that automatically calculates the cost," but rather a tool that reflects the assumptions we've organized as numerical values.

What is the AWS Pricing Calculator?

What you can do

The AWS Pricing Calculator is an official tool for estimating the cost of using AWS services in advance. Amazon EC2 and Amazon S3, Amazon You can calculate the estimated monthly cost by selecting major services such as RDS and entering the terms of use. The estimate results can be saved and shared, so they can be used for internal discussions and as consultation materials with vendors.

Things impossible

The calculator does not guarantee the actual billing amount. Billing amounts will fluctuate depending on configuration changes, increases or decreases in usage, data transfers, and other factors. Also, if the assumptions you enter are unclear, the figures that appear will differ from reality. It is important to understand that the calculator is merely an estimate based on assumptions.

Basic steps for creating a quote

Adding a Service

First, add the AWS services you want to include in your quote. Amazon The basic principle is to build up the entire configuration, including not only EC2 but also storage, databases, and network-related components.

Entering setting values

Next, enter the conditions such as instance type, capacity, and uptime. Here, you will need the prerequisites outlined in the previous chapter. The price will vary greatly depending on the uptime and whether or not redundancy is used, so do not enter anything randomly; instead, reflect the configuration and operational assumptions.

Check the total amount

Once you've completed entering the information, a breakdown of each service and the total amount will be displayed. The key is not to simply look at the total amount, but to see which elements are driving up the costs. The estimate is not just for calculating costs, but also to use as a basis for determining the configuration.

By major service | AWS pricing calculation concepts and points to note

The AWS Pricing Calculator can estimate many services, but the ones that have the greatest impact on prices are: Amazon EC2, Amazon S3, Amazon RDS. Here we will organize which items are likely to affect costs for each major service.

Points to look at when calculating EC2 charges

Instance type

Amazon In EC2, the price varies greatly depending on the instance type. Since the unit price varies depending on the CPU and memory performance, choosing specifications that are larger than necessary will increase the cost. The basic principle is to first choose a type that is just right for your purpose.

Number of units and operating hours

Amazon EC2 fees are determined by "number of units x operating hours." The monthly fee varies greatly depending on whether the environment is constantly running, such as a production environment, or only when needed, such as a testing environment. When making an estimate, it is important to first determine the operating hours assumptions.

Differences in purchasing options

Amazon In addition to on-demand, EC2 offers discount options such as Savings Plans and Reserved Instances. If you plan to use it for a long period of time, costs can vary greatly depending on the purchase option, so it's important to compare them at the quotation stage.

Commonly overlooked points when calculating S3 pricing

Storage Class

Amazon S3's unit price varies not only by storage capacity but also by storage class. Different classes are appropriate for frequently accessed data and data for archival purposes. Choosing a class that does not match the nature of your data can lead to unnecessary costs.

Number of requests

Amazon S3 charges not only for capacity but also for the number of read and write requests. For applications with high access frequency, such as log storage or image distribution, you need to estimate the cost including the request cost.

Data transfer volume

Even if S3 alone seems cheap, costs can increase if data is transferred externally. If you are using internet distribution or transferring data to another region, you should include the transfer volume in your assumptions.

Points that make a difference in RDS pricing calculation

Multi-AZ configuration

Amazon RDS allows you to select a multi-AZ configuration to increase availability, but this increases costs. While this is a standard option in production environments, it may not be necessary in testing environments, so you need to estimate costs separately for each environment.

Storage Configuration

Amazon RDS pricing varies not only by instance performance, but also by storage type and capacity. Storage costs tend to rise especially in configurations that prioritize IO performance, so caution is required.

Backup Retention Period

Amazon RDS allows you to set up automatic backups, but the longer the retention period, the higher the storage costs. This is an essential element for production operations, but if you don't include it in the estimate, there is a high chance of a discrepancy in the billed amount.

Reasons for discrepancy between estimated and actual bill

The pricing estimates provided by the AWS Pricing Calculator may not exactly match your actual bill. AWS fees vary based on usage, so the estimates are merely estimates based on assumptions.

Typical reasons why initial estimates are likely to be off

Increased access

If the number of accesses increases after the service starts, it will be necessary to add more servers and distribute the load, which will increase the cost. Amazon CloudFront, data transfer volume, and number of requests increase in proportion to usage, so this is a point that is difficult to predict in the early stages.

Configuration changes

Once in production, the configuration may change depending on availability and security requirements. Typical examples include adopting multi-AZ, strengthening backups, and adding monitoring. If elements that were omitted at the time of the estimate are added later, the bill will exceed the amount charged.

Increasing data volume

With AWS, storage costs continue to increase as data accumulates. Amazon Not only does it take into account S3 storage capacity, but log storage, backups, snapshots, etc., so the longer the operation period, the more likely the difference will become apparent.

Having "accuracy enough to judge" rather than "exact amount"

The role of initial estimates

The important thing about AWS estimates is not to get the exact price down to the last yen. In the initial stages, the goal is to understand "for this configuration, the monthly cost will be in this range" and "what are the factors that will increase costs," so that you can use it to make implementation decisions and design considerations.

The idea of ​​gradually increasing accuracy

The estimate is not completed all at once, but is updated as the configuration is solidified. By gradually increasing the accuracy, you can achieve realistic cost management, by giving a rough estimate at the PoC stage, then making more detailed estimates as the design progresses, and adjusting them based on actual data once production operations begin.

AWS pricing calculations don't end in one go

AWS costs fluctuate depending on usage, so estimates must be updated if configuration or operations change. Continuously reviewing estimates is a prerequisite for AWS cost management.

When to update your estimate

PoC stage

During the PoC and verification stages, the goal is not to "determine the exact price," but to get a sense of the cost. It is important to create an estimate based on rough assumptions and check which factors will affect the cost.

Before the show

Once the design is solidified and the production configuration becomes clear, the estimate should be updated. If elements required for production operation, such as redundancy, backups, and monitoring, are not reflected, the difference with the billed amount after implementation will be significant. Pre-production estimates also serve as the basis for internal approval and budget allocation.

After start of operation

Once operations begin, costs will fluctuate depending on actual usage. Initial assumptions will be disrupted by increased access and data accumulation, so actual results must be compared with estimates on a regular basis. This is when estimates will be directly linked to actual cost management.

A way of thinking that leads to continuous cost management

Periodic Recalculation

With AWS, costs fluctuate as your configuration and usage changes. By regularly updating your estimate and identifying which services are contributing to your costs, you can avoid unnecessary spending. Estimation should be treated as an "operations management tool" rather than a "pre-deployment tool."

Coordination with budget management

AWS fees are variable costs, not fixed costs. Therefore, operating without a budget can lead to unexpected increases in costs. Linking estimates to budget management and creating a situation where you can compare plans with actual results is important for cloud operations.

Summary | Avoiding confusion when calculating AWS fees

When estimating AWS fees, it is important to clarify the assumptions behind the calculations, rather than how to use the Pricing Calculator itself. AWS fees vary depending on the billing unit for each service, and can vary significantly depending on the configuration and operating conditions.

The basic procedure for calculating AWS charges is to proceed in the order of "Assumptions → Calculation." Only after you have organized factors such as uptime, redundancy, data transfer, and operational costs, does the tool input become meaningful.

Furthermore, estimates are not something that are created once and then finished. By updating them at each stage, from PoC, to production design, and after the start of operations, you can increase the accuracy of your decisions, leading to realistic cost management.

Do you have any concerns about AWS?

If you have any questions or concerns about using AWS, estimates, configuration, operation, etc., please feel free to contact us. We will help you make a smooth decision by establishing a common understanding with the local team and clarifying prerequisites.

This service, "IIJ Managed Cloud for AWS," is jointly provided by the IIJ Group, Japan's first commercial Internet service provider, and Serverworks, an AWS Premier Tier Service Partner. It is compatible with global environments, including Southeast Asia, and provides AWS support tailored to on-site decisions.

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