AWS is a complicated platform for engineering teams across the world. It is nearly impossible for one person to even know the names of all the services they have, let alone how they are billed. This handbook aims to explain all billing related concepts of AWS and how you can optimise the costs in you organisation.

🏢 Core Business of AWS

AWS provides different types of services and products. But at its very core, it buys (and manufactures) hardware from various OEMs and rents it to other companies at a premium. They incur upfront costs on hardware, property, security, compliances, air-conditioning, maintenance, software, technology and million other things. Their job is to abstract away the complexity of managing a datacenter from you so that you can focus on your business. This gives you peace at night, but comes at a cost.

🤝 How do you pay for AWS

1. Pay-as-you-go: Most of the services are billed similar to how you are billed for utilities like water, electricity etc. You pay for what you use.
2. Save when you commit: As you commit your usage, you can get discounts via instruments like savings plans, reserved instances etc.
3. Pay less by using more: Many services have tiered pricing. Meaning, the more you use, the less you pay.

Each service comes with its unique cost structure and offers various levers using which you can balance your costs, risks and comfort. As a manager of your AWS account, it is important for you to know the details deeply and take the right tradeoff between these three depending on the expertise of your team, bandwidth available and the nature of your applications.

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