Introduction

A core reason organizations adopt a cloud IT infrastructure is to save money.

The traditional approach of analyzing Total Cost of Ownership no longer applies when you move to the cloud.

Cloud services provide the opportunity for you to use only what you need and pay only for what you use.

We refer to this new paradigm as the Total Cost of Operation.

You can use Total Cost of Operation (TCO) analysis methodologies to compare the costs of owning a traditional data center with the costs of operating your environment using AWS Cloud services.

Eliminate Upfront Sunk Costs Organizations considering a transition to the cloud are often driven by their need to become more agile and innovative.

The traditional capital expenditure (CapEx) funding model makes it difficult to quickly test new ideas.

The AWS Cloud model gives you the agility to quickly spin up new instances on AWS, and the ability to try out new services without investing in large upfront, sunk costs (costs that have already been incurred and can’t be recovered).

If you are using the cloud you can return CapEx to the general fund and invest in activities that better serve your constituents.

AWS helps lower customer costs through its “pay only for what you use” pricing model.

To get started, it is critical to understand how to measure value, improve the economics of a migration project, manage migration costs and expectations through large-scale IT transformations, and optimize the cost of operation.

Launch an Amazon EC2 Instance for Free The AWS Free Tier lets you gain free, hands-on experience with AWS products and services.

AWS Free Tier includes 750 hours of Linux and Windows t2.micro instances each month for one year.

To stay within the Free Tier, use only EC2 Micro instances.