Module2 AWS Pricing Model

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Questions and Answers

What is the fundamental principle underlying AWS pricing?

Pay for what you use, with no upfront expenses (correct)

Long-term contracts with upfront costs

Tiered pricing based on service types

Fixed pricing for all services

What is the benefit of using AWS services instead of building on-premises infrastructure?

Lowering variable costs and redirecting resources to innovation (correct)

Increasing upfront expenses and long-term contracts

Committing to complex licensing dependencies

Reducing fixed costs and increasing variable costs

What is the pricing model used by AWS for its cloud computing services?

Fixed pricing for all services, regardless of usage

Subscription-based pricing with long-term contracts

Utility-style pricing with pay-as-you-go (correct)

Tiered pricing with fixed costs

What is the benefit of using AWS services with no upfront expenses?

Quickly adapting to changing business needs and redirecting resources Signup and view all the answers

What is the advantage of AWS pricing over traditional on-premises infrastructure?

No upfront expenses and pay-as-you-go pricing Signup and view all the answers

What is the characteristic of AWS services that allows you to quickly adapt to changing business needs?

On-demand availability with no upfront expenses Signup and view all the answers

What is the pricing principle that allows you to pay less when you use more?

Pay less when you use more Signup and view all the answers

What is the primary objective of using the AWS Pricing Calculator in this activity?

To develop a cost estimate for a project Signup and view all the answers

What is a potential hard benefit of using cloud services as mentioned in the text?

Reduced spending on compute, storage, networking, and security Signup and view all the answers

What is an example of a soft benefit of using cloud services according to the text?

Reuse of service and applications Signup and view all the answers

What is the recommended group size for this activity?

Four or five Signup and view all the answers

What is NOT a potential benefit of using cloud services according to the text?

Increased hardware purchases Signup and view all the answers

What is the purpose of using the AWS Pricing Calculator in the activity?

To calculate the cost of a project Signup and view all the answers

What is a potential soft benefit of using cloud services according to the text?

Increased global reach Signup and view all the answers

What is the ultimate goal of using the AWS Pricing Calculator in this activity?

To develop a cost estimate and report back to the class Signup and view all the answers

What is the basis for charging compute resources in AWS?

Per hour or second, depending on the instance type Signup and view all the answers

Which of the following is not a fundamental driver of cost with AWS?

Inbound data transfer Signup and view all the answers

How is outbound data transfer charged in AWS?

Per GB, aggregated across services Signup and view all the answers

What appears on the monthly statement as a result of outbound data transfer?

AWS Data Transfer Out Signup and view all the answers

What is the pricing model for storage in AWS?

Per GB Signup and view all the answers

Which of the following is a characteristic of AWS pricing models?

Utility-style pricing, where you pay for what you use Signup and view all the answers

What is the exception to the free inbound data transfer rule in AWS?

Some exceptions apply Signup and view all the answers

How do the characteristics of cost vary in AWS?

They vary depending on the instance type and pricing model Signup and view all the answers

Study Notes

AWS Pricing Philosophy

AWS pricing philosophy is to pay for what you use, with no long-term contracts and no upfront expenses.
You only pay for the services you consume, with the flexibility to start or stop using a product at any time.

Utility-Style Pricing Model

Pay for what you use: pay only for the services that you consume.
Pay less when you reserve: discounted rates for reserved instances.
Pay less when you use more: discounted rates for bulk usage.
Pay even less as AWS grows: economies of scale benefit customers.

How AWS Pricing Works

Compute: charged per hour/second, varies by instance type (Linux only).
Storage: charged typically per GB.
Data transfer: outbound is aggregated and charged per GB, inbound is free (with some exceptions).

Benefits of AWS Pricing

Hard benefits:
- Reduced spending on compute, storage, networking, security, and personnel.
- Reductions in hardware and software purchases (capex).
- Reductions in operational costs, backup, and disaster recovery.
Soft benefits:
- Increased developer productivity.
- Improved customer satisfaction.
- Agile business processes that can quickly respond to new and emerging opportunities.
- Increase in global reach.