Economies of Scale
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1h 13m

This course covers the core learning objective to meet the requirements of the 'Implementing effective Cost Management solutions in AWS - Level 1' skill

Learning Objectives:

  • Understand aspects of AWS Cloud economics, including OpEX, CapEX and TCO
  • Understand the various AWS account structures in relation to AWS billing and pricing practices
  • Understand which operations will reduce costs by moving to the AWS cloud
  • Analyze and contrast the various pricing models for AWS, such as On-Demand EC2 Instances, Reserved Instances, and Spot Instance pricing

Welcome to this section about economies of scale. Every time you attend AWS Re:Invent, the largest AWS conference worldwide, you can see this slide. 

The only thing that changes every year is the number of price reductions. Currently, this number is 69. 

How does AWS manage to reduce prices continuously?

The answer is quite simple: Economies of scale. But what does that mean?

Let's take a look at this cycle. More customers lead to higher AWS usage which leads to more infrastructure. The economies of scale effect occurs because costs can now be spread over a larger number of customers. The infrastructure becomes cheaper, prices can be reduced and new customers benefit from the lower prices. And then the cycle starts all over again. 

With AWS you’re likely to experience lower prices over time as their infrastructure grows and the economies of scale takes place.

About the Author
Learning Paths

Stuart has been working within the IT industry for two decades covering a huge range of topic areas and technologies, from data center and network infrastructure design, to cloud architecture and implementation.

To date, Stuart has created 150+ courses relating to Cloud reaching over 180,000 students, mostly within the AWS category and with a heavy focus on security and compliance.

Stuart is a member of the AWS Community Builders Program for his contributions towards AWS.

He is AWS certified and accredited in addition to being a published author covering topics across the AWS landscape.

In January 2016 Stuart was awarded ‘Expert of the Year Award 2015’ from Experts Exchange for his knowledge share within cloud services to the community.

Stuart enjoys writing about cloud technologies and you will find many of his articles within our blog pages.