Day 1 (AWS Zero-to-Hero)

Sakshi MaluskarSakshi Maluskar
3 min read

Understanding AWS Pricing Models, Cloud Computing Models, and Key Cloud Service Categories

As cloud computing has transformed how businesses handle data, AWS (Amazon Web Services) leads as a cloud provider with various pricing and service models. Here, we’ll break down AWS's pricing models, the differences in cloud computing setups, cloud service categories (IaaS, PaaS, SaaS), and a glimpse at AWS’s history.

AWS Pricing Models

AWS offers different pricing models to suit varying needs:

  1. On-Demand: Pay for compute or storage resources by the hour or second. Ideal for unpredictable workloads where usage varies.

  2. Reserved Instances: Commit to using AWS services for one to three years and enjoy lower prices. Best for steady-state workloads.

  3. Spot Instances: Bid for unused AWS capacity at discounted rates. This is suited for flexible tasks, like big data analysis, where interruptions are manageable.

  4. Savings Plans: Commit to a consistent usage level across services in exchange for lower rates, suitable for workloads with predictable usage.

  5. Dedicated Hosts: Provides physical servers for exclusive use, required by organizations needing dedicated hardware for compliance or licensing needs.

Each model balances flexibility with cost savings, helping businesses scale without overspending.


Cloud Computing Models: On-Premises, On-Cloud, and Hybrid Cloud

  1. On-Premises: All servers and storage are located within a company’s own data center. Often used for highly secure environments, it offers control but requires higher upfront costs and maintenance.

  2. On-Cloud: Resources and applications are hosted entirely on cloud platforms like AWS, offering flexibility, scalability, and no physical maintenance. This model suits businesses prioritizing cost-effectiveness and rapid growth.

  3. Hybrid Cloud: A combination of on-premises and cloud resources, allowing sensitive data to remain on-site while leveraging cloud benefits for scalability and cost savings. Ideal for organizations managing highly sensitive data but needing cloud flexibility for other functions.

Choosing between these models depends on data sensitivity, scalability needs, and cost considerations.


Cloud Service Models: IaaS, PaaS, and SaaS

AWS offers services across three primary cloud service models:

  1. Infrastructure as a Service (IaaS): Provides essential compute, storage, and networking resources. Users manage the OS and applications. Example: AWS EC2, where users can deploy virtual machines. Ideal for companies that need control over their environment but want cloud flexibility.

  2. Platform as a Service (PaaS): A managed environment where AWS handles the OS and infrastructure. Developers focus on building applications. Example: AWS Elastic Beanstalk, used to deploy applications without managing servers. Best for developers who want to focus solely on application code.

  3. Software as a Service (SaaS): Complete applications managed by AWS, accessed by users through the internet. Example: AWS's managed databases (Amazon RDS). This model is suitable for end-users who want ready-to-use applications without maintenance.

Each model provides a different level of control, making it easy for businesses to find the right fit for their technical and operational needs.


A Brief History of AWS

AWS, launched in 2006, pioneered cloud computing. Some notable milestones include:

  • 2006: Launch of EC2 (Elastic Compute Cloud) and S3 (Simple Storage Service), foundational services that marked the beginning of AWS.

  • 2012: AWS achieves $1 billion in annual revenue, proving cloud computing’s viability.

  • 2014: Introduction of Lambda, serverless computing enabling developers to run code without managing servers.

  • 2016: Launch of AI services like Rekognition, making machine learning accessible.

  • 2021: AWS introduces new services for machine learning, quantum computing, and sustainability, continuing innovation.

AWS has grown significantly, from basic cloud storage to offering comprehensive tools across AI, IoT, serverless computing, and more, enabling businesses of any size to leverage cutting-edge technology.


In summary, AWS’s pricing, cloud computing models, and service categories cater to diverse business needs, transforming IT infrastructure from rigid setups to flexible, scalable environments. With AWS’s evolving service portfolio, businesses can innovate without worrying about infrastructure constraints.

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Written by

Sakshi Maluskar
Sakshi Maluskar