The email from your rep comes in, a potential 3 year savings of 46.8% your CEO gets excited, your CFO gets excited, and your CTO creates a new KPI is created “Reduce AWS cost by 40%.” Should be easy but it isn’t. This post is based on actual numbers I’ve received in the past. The 3 year savings is usually based on a few factors many of which will likely not work out for everyone.

  • The cost savings is usually the result the of paying 3 years upfront in my example the monthly spend is about $18,000 the upfront cost would be $343,000. This would mean a pretty heavy outlay but you wouldn’t have an AWS bill for this part of your services for the next 3 years.
  • This level of cost savings almost always ties you into a specific instance type in a specific region for 3 years so you’d better hope you don’t have to expand or move hosts to new regions to work with your customers.
  • Even if you do go with the 3 years upfront option this doesn’t totally eliminate your AWS spend you’ll still pay for other services you need like bandwidth, Cloudwatch, S3, KMS and other services.

This rant isn’t to say don’t put any effort into cutting AWS cost, there are certainly opportunities to do so, it’s to level set and remind people if it sounds too good to be true it probably is.