Cost Calculator AI
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Cloud Computing Cost Calculator

Calculate and forecast cloud virtual machine (VM) compute costs across on-demand, 1-year and 3-year reserved instances, spot instances, and operating system licensing.

e.g. AWS c6i.xlarge ~$0.17/hr
730 hrs = 24/7 full month
$0 for Linux; ~$0.04-$0.15 for Windows/RHEL

Calculated Cloud & Storage Breakdown

Cloud Compute Cost Formula

Monthly Compute = (Instances * Hourly Rate * Running Hours) * (1 - Discount Rate) + (Instances * OS Rate * Running Hours)
  • Hourly Instance Rate: Raw hourly rate for chosen vCPU and RAM configuration.
  • Running Hours Per Month: Average monthly operating hours (730 hours for 24/7 continuous operation).
  • Commitment Discount: ~35% for 1-year reserved/savings plans, ~60% for 3-year commitments, ~70% for spot instances.
  • Operating System License: Per-hour surcharge for Windows Server, Red Hat Enterprise Linux (RHEL), or SUSE.

Step-by-Step Worked Example

Scenario: A company runs 2 cloud instances (4 vCPU, 16 GB RAM) at $0.10/instance/hour for 730 hours/month on a 3-year reserved discount (60% savings), with zero OS surcharge.

Calculation Steps:

  1. Base On-Demand Monthly: 2 * $0.10 * 730 = $146.00/month
  2. 3-Year Reserved Discount (60%): $146 * 0.60 = $87.60 savings
  3. Net Monthly Compute: $146 - $87.60 = $58.40/month
  4. Annual Cloud Cost: $58.40 * 12 = $700.80/year
  5. Effective Cost Per Hour: $58.40 / (2 * 730) = $0.0400/instance/hr
Result: 3-year commitment reduces monthly compute from $146.00 to $58.40, saving $1,051.20 annually.

How to Use This Calculator

  1. 1Enter the quantity of virtual machine instances required.
  2. 2Input the baseline hourly rate per instance from your cloud provider pricing chart.
  3. 3Select your pricing commitment model (On-Demand, 1-Year Reserved, 3-Year Reserved, or Spot).
  4. 4Specify expected running hours per month (730 for full continuous availability).

Assumptions & Limitations

  • A full operational month averages 730 hours (365 days * 24 hours / 12 months).
  • Does not include attached EBS/managed disk storage (calculate separately under Cloud Storage).

Frequently Asked Questions

What is the difference between On-Demand and Reserved Instances?

On-demand allows you to launch and terminate instances by the second with no commitment at standard retail prices. Reserved instances and Savings Plans offer 30% to 60% discounts in exchange for committing to consistent compute usage over 1 or 3 years.

When should you use Spot Instances?

Spot instances utilize spare cloud capacity at up to 70-90% discounts, but can be reclaimed by the provider with a 2-minute warning. They are ideal for stateless web tiers, batch jobs, containerized microservices, and CI/CD pipelines.

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