How to avoid AWS bill shock

Note: AWS Pricing accurate as of December 7, 2023 and subject to change

The costs of Amazon Web Services (AWS) are notoriously difficult to understand, which can result in the dreaded “AWS bill shock”—when users are surprised with an AWS bill that may be thousands of dollars more than they expected. AWS bill shock is so common that there are many threads on social media sites such as Twitter (X) and Reddit on surprise bills from AWS, and there are several consulting agencies that specialize in decoding AWS bills.

In this article, we will walk you through understanding your AWS bill, hidden costs, and how to monitor and manage your spending effectively to avoid bill shock. We will also show how DigitalOcean prioritizes pricing transparency and predictability so that cloud users aren’t surprised by their bill at the end of the month. Read on for more information on how to avoid AWS bill shock and get control over your cloud expenses.

Understanding your AWS bill: Breaking down the costs

Understanding AWS bills is key to preventing unexpected charges and optimizing your cloud costs. AWS provides a myriad of services, and each has its own costs and potential discounts. To effectively manage your expenses, you need to understand the charges and discounts associated with your AWS account, as well as what unexpected charges could come up if you don’t carefully monitor your cloud infrastructure setup.

What is an AWS bill?

An AWS bill is an itemized record of your organization’s monthly AWS charges, including usage and rates for the services you’ve used, details of any discounts, credits or refunds applied, and applicable taxes. AWS, similarly to other cloud providers, works on a pay-as-you-go model, so you only pay for the resources you used in the prior month. The AWS billing cycle runs monthly, and your AWS bill for the previous month is usually charged to your payment method between the third and fifth day of the month.

Navigating the AWS Bills page

The AWS Bills page has the most information about your AWS bill, however, it is quite complex and can be difficult to comprehend, especially for new AWS users. The AWS Bills page offers an overview of your billing and cost management, including details on AWS-provided services and AWS Marketplace purchases.

Before you access the AWS Bills page, make sure to grant Billing console access to IAM Users. After logging in with your root account credentials, click on your account name or number in the navigation bar and select ‘My Billing Dashboard.’ From there, you can explore the various sections of the AWS Bills page, such as:

• Overview

• Detailed billing report

• Payment history

• Payment methods

• Cost allocation tags

Decoding AWS charges and discounts

AWS bills consist of charges for various services, including usage fees and support costs. Discounts and potential savings may also apply, such as Savings Plans or Reserved Instances. Gaining a clear picture of these charges and discounts is paramount for effective AWS billing and cost management.

Hidden AWS costs that can stack up

Hidden costs can significantly impact your AWS bill. Some of these concealed expenses include egress charges, support fees, and other unforeseen fees. Recognizing these hidden costs allows you to act and mitigate their effect on your bill.

Egress charges

AWS egress charges refer to the costs incurred when data is transferred from AWS to another location, such as another cloud provider, your on-premises infrastructure, or the public internet. AWS also charges users for inter-regional AWS data transfer, for example, when transferring data between two different AWS regions or availability zones. All of these charges can vary based on the AWS service, the destination of the data transfer, and the source region.

AWS egress pricing is complex, with outbound data transfer for EC2 and S3 storage costing $0.09/GB for the first 10 TB, then dropping to lower rates. This means that if a user had 5 TB of data to transfer from EC2 storage to the internet, the egress costs would be $460.80 on AWS. While other hyperscaler cloud providers such as Google Cloud Platform and Microsoft Azure have similarly priced egress charges, smaller providers like DigitalOcean have more competitive bandwidth pricing, which can save businesses thousands of dollars a month.

To reduce egress charges, users must be very thoughtful about their architecture, and consider using AWS services within the same region or availability zone, or opt for AWS Direct Connect for data transfer between your data center and AWS.

Support fees

AWS support fees refer to the charges incurred when utilizing AWS support services, such as Developer Support, Business Support, and Enterprise Support plans. These fees are calculated based on the total monthly AWS charges for all account IDs subscribed to the respective plans. Because AWS bills its support plans based on a percentage of the total cloud bill, your support fees will increase if your other AWS usage increases, even if you didn’t have more need for AWS support services in that month.

For example, the AWS Business Support Plan costs $100/month or 10% of your first $10,000 in spend, 7% of spend between $10,000 and $80,000 and a lower percent of the rest of your cloud spend. So a customer spending $8,000 one month would have a Support fee of $800, but if the following month they need to use more cloud resources and spend $15,000 on their cloud bill, support charges would increase to $1,500.

Other hidden fees

Additional hidden fees can come from various sources, such as:

• Idle EC2 instances, which can still charge you if they are not shut down even if they are not being used.

• Auto-scaling groups for EC2, which can incur extra charges if not terminated or if scaling policies are not kept up-to-date

• AWS RDS, which may have additional costs for storage, data transfer, or backups

• AWS S3, which charges for storage, data transfer, and requests

• AWS Lambda, which has costs based on the number of requests and duration of execution

• Elastic beanstalk environment, which may have additional costs related to its resources and usage

• Unused or “orphan” snapshots—you may still be billed for these if you have deleted elastic block storage (EBS) but are storing snapshots on S3.

• AWS SageMaker Canvas, it’s no-code ML interface, which may not stop a session unless the user logs out.

In the case of AWS Relational Database Service (RDS), costs can also arise from:

• Automated patching

• Automatic maintenance

• Support fees

• Data transfer fees

• Idle resources

Monitoring and managing AWS costs

For effective AWS cost management, customers should keep a close eye on their spending and use tools like AWS Cost Explorer and billing alerts. These cloud monitoring tools provide insights into your AWS usage, helping you optimize resource usage and control costs. While using these tools can help monitor your usage and avoid AWS bill shock, they also require a member of your team to proactively monitor your usage and make required changes to your infrastructure to stop unnecessary charges. Many small businesses and individuals don’t have the time to dedicate to this, which is one reason that AWS bill shock is so common.

AWS Cost Explorer

AWS Cost Explorer is a tool for managing your cloud costs, including those associated with services like Elastic Beanstalk. It provides comprehensive insights into your AWS usage and expenses, allowing you to visualize, comprehend, and manage your costs effectively through the cost management console.

With Cost Explorer, you can analyze your bill, monitor spending tendencies, and recognize cost-saving possibilities. The tool can analyze daily, monthly, and forecasted spend, resource configuration, and spending patterns to identify potential cost-saving opportunities. Using AWS Cost Explorer allows you to make educated choices to control and reduce your AWS costs. However, Cost Explorer itself has several nuances and it can take some time to fully understand how to use Cost Explorer to accurately predict and monitor your monthly costs.

Setting up billing alerts

Billing alerts on AWS enable you to establish a monetary threshold for your account charges. If charges exceed this threshold, you will be sent an email notification, helping you stay on budget and avoid unexpected bill shocks with AWS billing.

You can configure billing alerts within the Billing Preferences section of your AWS account. By setting up billing alerts, you ensure that you are informed of any potential cost overruns and can take appropriate action to manage your expenses effectively.

AWS cost allocation tags

One action that many AWS cost experts recommend is tagging your AWS resources so that you can clearly identify what different costs are associated with. AWS automatically adds certain tags to your bills, but user-generated cost allocation tags can be uniform across all of your AWS services and can be an excellent tool for you to help understand where different parts of your bill are coming from. If you have multiple products, applications, or even businesses that are managed by the same AWS account, tagging is also useful to help you separate those costs.

Resolving billing issues and contacting AWS support

You may face billing issues at times, which will necessitate help from AWS Support. Knowing how to resolve these issues and when to contact AWS Support to escalate concerns is crucial to managing your AWS costs effectively.

Filing a Support Ticket for Billing Issues

If you encounter a billing issue, the first step is to file a support ticket with AWS. You can do this by visiting the AWS Contact Us page and submitting a ticket. The response time for billing issues is typically within 24 hours, though AWS support response times can sometimes be longer than anticipated.

It’s essential to provide all the necessary information when filing a support ticket, such as your account details, billing issue description, and any relevant screenshots or documentation. This will help AWS Support resolve your issue more efficiently.

Avoid AWS Bill Shock with DigitalOcean

DigitalOcean is a cloud platform that provides an alternative to AWS, offering cost-effective bandwidth pricing and a straightforward pricing structure. Choosing DigitalOcean can help you steer clear of AWS bill surprises and have a clearer understanding of your cloud expenses.

Affordable bandwidth pricing

DigitalOcean includes generous bandwidth allowances included in the price of all Droplet virtual machines, starting at 500 GiB/month for the smallest Droplet, and going up based on Droplet type. Bandwidth is also pooled between Droplets, so you aren’t charged overages unless you go over the full bandwidth pool. DigitalOcean overage bandwidth costs just $0.01/GiB, and does not differ by region. This cost is significantly lower than AWS, which does not include any bandwidth automatically in their virtual machines and charges $0.09/GB for the first 10 TB of data transfer to the internet, and $0.05/GB for data transfer in excess of 150 TB.

By optimizing your utilization and selecting the appropriate DigitalOcean plan, you can significantly reduce your bandwidth costs. DigitalOcean customer Validin experienced a savings of $2,000 when they moved to DigitalOcean from AWS due to more favorable bandwidth pricing:

“When we tried Premium CPU-Optimized Droplets we moved a workflow that was in AWS, and with the Premium CPU-Optimized Droplets our workloads got faster by several hours. Right off the bat we saved $2000 a month with DigitalOcean, and we get better performance.” - Kenneth Kinion, Managing Director, Validin

Transparent pricing structure

DigitalOcean’s pricing structure is transparent and easy to understand, offering a variety of plans and configurations to fit different requirements. DigitalOcean’s pricing calculator allows users to estimate their bills, and add-ons like Premium Support are offered at a flat monthly rate, and not based on a percentage of cloud spend. A transparent pricing structure from DigitalOcean includes the following benefits:

• Helps users understand and forecast their costs better

• Allows you to make more informed decisions when it comes to allocating resources

• Helps in managing your cloud spending effectively

Avoid AWS bill shock by migrating to DigitalOcean today

Understanding and managing AWS costs is essential for avoiding bill shock and optimizing your cloud spending. By decoding your AWS bill, identifying hidden costs, monitoring usage with tools like AWS Cost Explorer, and setting up billing alerts, you can regain control over your expenses. However, many small businesses do not have the time or resources required to closely monitor their cloud costs, which can result in unforeseen costs that can be detrimental to your business growth.

Considering alternative cloud platforms like DigitalOcean can help you avoid unexpected charges and better manage your cloud spending. DigitalOcean is tailored to the needs of small-to-midsize businesses, individual developers, and startups, and our team of experts is ready to help you migrate your cloud infrastructure from AWS. Just contact our team today, or sign up for an account directly to get started.