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AWS Pricing Plans & Tiers

Comprehensive cloud computing platform by Amazon

Hosting & Infrausage-basedFrom $2020/mo

Pricing last verified: March 16, 2026

Data compiled by Arthur Jacquemin, Founder & Lead Analyst
Updated March 16, 2026
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Pricing Analysis

AWS dominates cloud infrastructure through extreme vertical and horizontal integration. The free tier offers $750 in monthly credits across compute, databases, and CDN services, removing evaluation friction for individuals and startups. However, this generosity masks the deeper economics: free tier limits (750 hours of t2.micro, 5GB database) are designed as training wheels that force graduation to paid instances once workloads become real. AWS's engineering strategy is to lower entry costs while capturing long-term value through lock-in and volume scaling.

AWS's 300+ services create a pricing expansion problem endemic to hyperscaler platforms. A 'simple' web application requiring compute, database, load balancing, caching, and monitoring incurs charges across EC2, RDS, ELB, ElastiCache, and CloudWatch — each with distinct pricing dimensions. The cumulative total often exceeds alternative PaaS platforms that bundle these services into single SKUs. AWS doesn't compete on per-service cost; it competes on breadth of choice and the ability to claim ROI through utilization optimization across an impossibly complex portfolio.

AWS's committed-use discounts (1-year and 3-year reserved instances) are a pricing defense mechanism against competitors. By exchanging upfront commitment for 30-40% discounts, AWS locks in customer behavior and reduces their incentive to evaluate alternatives. The savings are mathematically real, but the psychology is equally important: teams with $500K/year reserved instance commitments face organizational friction to migrate, even if competitors offer better terms.

Strengths

  • Free tier with $750 monthly credits eliminates barrier to experimentation for individuals and early-stage teams.
  • Breadth of services allows single-vendor architecture without external integrations, reducing operational complexity despite pricing complexity.
  • Reserved instance discounts of 30-40% reward planning and commitment, creating meaningful TCO advantage for stable production workloads.

Considerations

  • 300+ services create pricing expansion problem where 'simple' applications require bundling compute, database, caching, and monitoring across distinct SKUs and pricing models.
  • Committed-use discounts require upfront planning and create organizational switching costs, making it difficult to evaluate alternatives mid-commitment.
  • Per-service billing without bundling incentives means production workloads often cost 2-3x more than calculated sticker price.
Ideal For

Organizations with stable, multi-service production workloads that can optimize across AWS's portfolio and commit to 1-3 year reserved instances.

Pricing Takeaway

AWS's free tier is a customer acquisition engine disguised as generosity; the real pricing power emerges through reserved instance lock-in and cross-service bundle expansion.

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Pricing Plans (4)

How does AWS pricing work?

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Pricing for AWS products

$2020/mo
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Frequently Asked Questions

How much does AWS cost per month?
AWS has no fixed monthly fee — you pay per resource used. EC2 instances range from $0.01/hour (t2.micro) to $10+/hour (high-performance servers). S3 storage costs $0.023/GB/month. RDS databases start at $15-30/month. A typical startup paying $100-500/month on AWS, while enterprise organizations can spend $50,000+/month.
Is AWS free to use for startups or side projects?
AWS Free Tier includes 1 year of free services (t2.micro EC2 instance, 5GB S3 storage, limited RDS usage, etc.). After 12 months, charges apply. The catch: it is easy to exceed free tier limits with misconfiguration (e.g., large data transfers, running expensive instances). Monitoring bills is essential.
How much will my first AWS bill be?
With the free tier applied properly, your first bill can be $0-10/month. Common cost drivers: data transfer out ($0.09/GB to internet), RDS instances (if needed), and Lambda invocations ($0.0000002 per request). Most startups staying within free tier limits pay $0-5/month initially. Once you exceed free tier, costs scale with usage.
What is the difference between AWS EC2 on-demand and reserved instances?
EC2 on-demand (pay-per-hour) costs $0.01-10/hour depending on instance type. Reserved instances (1 or 3-year commitment) offer 30-70% discounts. A t3.medium costs $0.0416/hour on-demand ($300/year) or $0.0235/hour with a 3-year commitment ($206/year) — saving roughly 31%. Reserved instances lock you in but offer predictable costs.
How does AWS pricing compare to DigitalOcean or Heroku?
DigitalOcean Droplets start at $5/month (fixed). Heroku Dynos start at $7/month (fixed). AWS is pay-as-you-go, so a simple app might cost $0-10/month but scales unpredictably. For predictable small projects, DigitalOcean or Heroku are cheaper and simpler; AWS is cheaper at large scale.
Can I get a discount on AWS if I commit upfront?
Yes — AWS Savings Plans commit to a dollar amount (e.g., $1,000/year) and discount all compute consumption by 20-60%. Reserved Instances commit to specific instance types with 30-70% discounts. Upfront commitment lowers your effective hourly cost significantly. For predictable production workloads, Savings Plans are worth evaluating.

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Sources

  1. AWS Official Pricing— Vendor pricing page

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