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AWS Announced Tiered Pricing for Its Serverless Offering Lambda

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AWS Announced Tiered Pricing for Its Serverless Offering Lambda

Aug 09, 2022 2 min read

Recently, AWS announced tiered pricing for Lambda, a serverless, event-driven compute service allowing developers to run their code for virtually any application or backend service without provisioning or managing servers. With tiered pricing, monthly costs for running large workloads on Lambda can be reduced.

Earlier in 2020, the company had announced that it would include Lambda in Savings plans, and later at re:Invent also reduced the billing granularity to 1 ms. Furthermore, in September 2021, AWS announced Graviton2 support for running functions on ARM and potential improvements for price performance for compute.

The new tiered pricing for monthly Lambda function duration (GB-Seconds of usage) provides customers with two additional pricing tiers that discount their aggregate monthly on-demand function duration. A 20 percent discount for functions running on both x86 and Arm (powered by AWS Graviton) can be achieved.

1AWS%20Lambda%20Tiered%20Pricing-1659810048292.png

Source: https://aws.amazon.com/blogs/compute/introducing-tiered-pricing-for-aws-lambda/

Yan Cui, an AWS serverless hero, tweeted:

New in Lambda land: tiered pricing.
It's been a long time coming. Useful if you run Lambda on a large scale. For context, 6B GB-seconds = 120B invocations of a 256MB function with avg 200ms duration. 
Most of you won't get to enjoy the discount ;-)

In an AWS news post on the priced tiering for AWS Lambda, Heeki Park, principal solutions architect, Serverless at AWS, explains in an example:

When considering tiered pricing, the compute duration portion is under 6B GB-s and is priced without any additional pricing discounts.

Other public cloud vendors like Microsoft and Google offer consumption-based (serverless) Functions. With Azure Functions, customers are billed GB-Seconds of usage with a free grant of 400,000 GB-s, and Google Cloud Functions has a free tier, which in addition to the 2 million invocations, provides 400,000 GB-seconds, 200,000 GHz-seconds of compute time, and 5GB of Internet egress traffic per month. As for cost savings, Azure Functions and Google Cloud Function do not offer tiered pricing like AWS Lambda.

Steve Wilson, chief product officer at Contrast Security, told InfoQ:

I believe this pricing change from AWS demonstrates that customers are using Lambda more heavily than ever before -- and with improved pricing, this will accelerate even further. At Contrast Security, the substantial interest we're seeing in securing Lambda-based workloads is another indicator that Lambda has jumped to the mainstream for mission-critical applications.

In addition, a correspondent rmbyrro on a Hacker News thread on the tiered pricing for AWS Lambda stated:

That will help the adoption of Lambda. The primary point of serverless (financially-wise) is trading fixed costs for variable costs.

Yet, another respondent, arinlen contradicted by stating:

I'm not sure that's the case with AWS Lambda. Its main use is to serve as glue code between AWS services, and for that its free tier is quite roomy. I'm sure vendor lock-in plays a much bigger role than the classical cloud computing selling points.

Lastly, the Lambda pricing page lists the pricing for all regions and architectures. 

About the Author

Steef-Jan Wiggers

Steef-Jan Wiggers is one of InfoQ's senior cloud editors and works as a Technical Integration Architect at HSO in The Netherlands. His current technical expertise focuses on integration platform implementations, Azure DevOps, and Azure Platform Solution Architectures. Steef-Jan is a board member of the Dutch Azure User Group, a regular speaker at conferences and user groups, writes for InfoQ, and Serverless Notes. Furthermore, Microsoft has recognized him as Microsoft Azure MVP for the past eleven years.

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