AWS Lambda Pricing in Context - A Comparison to EC2

Andy Warzon Trek10
Andy Warzon | Aug 17 2016

Wed, 17 Aug 2016

There are many compelling reasons to consider a Serverless / Lambda-based architecture for your next project: scalability, fault-tolerance, low maintenance cost, high flexibility. But one of the most often-cited is cost.

A typical AWS serverless stack has several cost components: Lambda, API Gateway, DynamoDB, and often S3 & CloudFront. In this post we’ll focus on Lambda.

Lambda pricing is as follows:

  • $0.20 per 1 million requests
  • $0.00001667 for every GB-second of compute, with every execution rounded up to the nearest 100ms

You can read all the gory details on the AWS Lambda pricing page.

But these numbers can be a little hard to wrap your head around… just how does this pricing compare to EC2? Of course, the answer is all about utilization.

If you have a somewhat low utilization application, it’s not even close: Lambda is dramatically cheaper.

I’ll illustrate that below with two simple examples to give you a sense of what “low utilization” means.

Low Utilization Pricing Comparison: Lambda vs. EC2

Lightweight and low-traffic website

  • 10,000 hits/day
  • perhaps 200 ms of execution time per hit at 256MB
  • → 432,000 requests per month and 2160 GB-sec of compute per month
  • → about $0.31/mo

… less than 1/10th the cost of even a t2.nano, the smallest EC2 instance!

Periodic Scheduled Job

  • A scheduled job that runs every hour with 1GB RAM for 2 minutes
  • → 86,400 GB-sec of compute per month and 720 requests per month
  • → $1.44/mo

… still less than 1/3rd of a t2.nano!

(And a t2.nano only gives you 0.5GB of RAM, so this type of job wouldn’t even be possible on it.)

Bigger Workloads - Lambda Breakeven Analysis

The story is less obvious for bigger workloads. One approach here is to look at the break-even utilization rate:

How much compute would your EC2 instance have to do to be cheaper than Lambda for that same workload?

For comparison, we’ll use a typical workhorse instance, the m4.large instance type. It has 2 vCPU and 8 GB RAM and costs $0.12/hr or approx $86/month in the N. Virginia region.

Lambda Breakeven Analysis for an m4.large Instance

Function Execution Memory & TimeRequests per Hour Required for Lambda Cost to Equal EC2 CostRequests per Second
100 ms @ 128 MB295,00081.9
200 ms @ 512 MB64,00017.8
200 ms @ 1 GB34,0009.4
1 sec @ 1 GB7,1002.0

So what does this mean? If a typical transaction in your application takes 100 milliseconds to run and uses 128 MB of RAM, your m4.large instance (with 2 vCPU and 8 GB RAM) would need to be running 82 requests per second, every second of every day, before it is more cost effective than running the same workload on Lambda. Could a single m4.large even handle 82 requests per second? Well of course that depends greatly on the workload, but typically that would be quite a lot.

On the other end of the spectrum, if your typical transaction is long-running (1 second execution time) and needs a full 1 GB of RAM for each transaction, then it would take 2 requests per second, every second of every day, on an m4.large with two vCPUs and 8 GB of RAM total, before EC2 is more cost effective. Again, whether or not that is reasonable depends greatly on your individual workload, but it gives you a sense of how heavily loaded your EC2 instance would need to be before it is more cost effective than Lambda.

This is a simple analysis with a lot of caveats (storage costs for EC2 are ignored, reservation savings are ignored), but it is meant to illustrate the general point… it takes a LOT of compute volume, more than one would typically run on an instance with 2 vCPUs and 8 GB of RAM, before Lambda costs are similar to EC2 costs.

And of course, we’re completely ignoring total cost of ownership here. There is no autoscaling or clustering or load balancing to build & manage, no containers to create and ship, no security patching. So even if Lambda is more expensive than EC2, in some cases, there is still a strong case for using it.


Keep these two points in mind:

  • For most periodic or very light workloads, Lambda is dramatically less expensive than even the smallest EC2 instances.
  • Focus on the memory and execution time that a typical transaction in your app will need to relate a given instance size to the break-even Lambda cost.

So now get out there and create some Lambda functions! And hit us up on Twitter{:target=“_blank”} if you’ve got any good ideas on how to analyze Lambda pricing.

And while you’re here, check out AWS Data Ingestion Cost Comparison: Kinesis, AWS IOT, & S3.

Andy Warzon Trek10
Andy Warzon

Founder & CTO

Founder & CTO, Andy has been building on AWS for over a decade and is an AWS Certified Solutions Architect - Professional.