Before the public Cloud, if you needed a group of servers to host a website you had to order them. You can still do this today: place an order for physical hardware. It's a perfectly valid option. But the problem was the billing cycle and financial efficiency.
Public Cloud billing models generaly bill you for every minute or second that you're using their resources. They're utility based models too, which means you only pay for what you're consuming, when you're consuming it.
AWS' billing model can be complex, so make sure you're aware that it's very easy to incur large charges in AWS without realising it, and within hours.
Physical hardware is, long the run, always cheaper than running the same hardware on AWS. For example, with Hetzner you can order servers much, much cheaper than you could the equivalent in AWS. You can get more CPU cores, RAM, disks, everything. But you're paying monthly fee whether you use 100% of the resource you've rented or 0%.
In AWS that same server can be created, used at 100% capacity for 300 second (five minutes), and you'll be billed for 300 seconds.
Consider the following.
A PX62 server from Hetzner has 18 CPU cores and 64GB of RAM. That's a chunky server! The (closest) AWS equivalent is a
c6g.8xlarge that gets you 32 CPU cores and 64GB of RAM. The Hetzner server is
$96 per month. The AWS server is
$918 per month. That's 9.5x more expensive.
But what if you create the
c6g.8xlarge, use it for three hours, and then delete it? You pay
$3.72. And you never have to manage it again, secure it, or deal with it at all. You create it, use it, delete it.
If you did that every weekday for a month (20 days), you'd pay
$75 for the entire month for nearly double the CPU cores and the same RAM.
So the public Cloud billing model gives us two things: per-second billing and the ability to very efficiently use Cloud resources and then immediately stop using them so that we're not paying anymore.
This is known as utility billing because it's the same concept as the electricity you have at home: you turn on the light, you use and pay for the electric. You turn it off, you don't pay. Simple.
In AWS the billing concepts are not simple. The pricing models for some services can be really annoying to work with. In fact, Cloud can actually be quite off-putting to a lot of organisations because costs actually move from predictable to completely unknown.
You'll need to use AWS Billing to run reports, set up billing alarms, and more, to help your organisation manage their spending in the public Cloud.