How Much Does It Really Cost to Build a SaaS on AWS in 2026?

The cost of building a SaaS on AWS ranges from $100 to $5,000+ per month, depending on your scale. However, the more important question isn’t about AWS’s pricing structure; it’s about understanding where your money actually goes and how to avoid the common pitfalls that cause costs to spiral.

Many founders make the same mistakes. They launch test servers during development, get caught up in building features, and forget those resources are still running. A month later, they’re hit with a $500 bill for infrastructure nobody’s using. Others enable detailed logging to debug an issue, then leave it on indefinitely, paying $200 for logs they’ll never review.

This guide provides a realistic breakdown of AWS costs at each stage of growth from MVP to scale, along with practical strategies for cost optimization based on real-world implementations.

Understanding AWS Pricing Structure

AWS operates on a pay-per-service model rather than offering bundled hosting packages. You’re billed separately for compute resources, storage, databases, data transfers, and monitoring services. Each component has its own pricing structure, and these costs compound quickly.

Think of it as itemized billing at a restaurant. You do not pay a flat rate for “dinner”, you are charged for each appetizer, entree, beverage, and dessert individually, plus applicable taxes. AWS billing works the same way, with line items for every service you consume.

For most SaaS applications, three primary cost categories dominate your bill:

• Compute Resources: EC2 instances or Lambda functions that execute your application code
• Storage Solutions: S3 buckets for user uploads, backups, and media assets
• Database Services: RDS or DynamoDB instances storing your critical business data

Beyond these core services, smaller costs accumulate from load balancers running continuously, data transfer fees when users download content, CloudWatch logs that grow unchecked, and various auxiliary services that often go unnoticed until the bill arrives. Understanding each component is essential for effective cost management.

Realistic Cost Breakdown by Stage

MVP Stage (0-500 Users): $100-200/month

During the initial development phase, cost efficiency is critical. You need sufficient infrastructure to validate your product concept without committing resources to capacity you do not yet need.

A typical MVP infrastructure includes:

• Single compute instance (t3.small EC2): $15/month
• Small database instance (RDS): $30/month
• Basic file storage (S3): $2-5/month
• Application Load Balancer: $20/month
• Essential monitoring and logging: $10/month
• DNS and miscellaneous services: $5/month

Total Monthly Cost: Approximately $100

At this stage, resist the temptation to over-engineer your infrastructure. Auto-scaling, multiple server instances, and advanced caching layers are unnecessary until you’ve validated product-market fit. Focus on simplicity and cost efficiency while proving your business model.

Growth Stage (1,000-10,000 Users): $400-700/month

Once your product gains traction, infrastructure requirements increase proportionally. The challenge at this stage is scaling efficiently without allowing costs to grow faster than revenue.

Your infrastructure costs typically evolve to:

• Multiple compute instances (2-3 servers): $60-100/month
• Production database with automated backups: $120-150/month
• Expanded storage with CDN integration: $40-60/month
• Load balancing infrastructure: $40/month
• Data transfer costs (API calls, file serving): $80-150/month
• Enhanced monitoring and alerting: $30/month
• Security and compliance tools: $20-30/month

Total Monthly Cost: Approximately $500

This phase sees the most rapid cost acceleration. Data transfer fees often surprise teams at this stage, as they scale proportionally with usage. The key is monitoring actual resource utilization and scaling based on metrics rather than assumptions. Avoid overprovisioning—add capacity when performance data indicates it’s necessary, not in anticipation of hypothetical needs.

Scale Stage (50,000+ Users): $3,000-5,000+/month

At significant scale, AWS infrastructure becomes a substantial operational expense requiring dedicated oversight. Your monthly bill transitions from an incidental cost to a meaningful budget line item.

Enterprise-level infrastructure costs include:

• Auto-scaling compute fleet: $600-1,000/month
• Production database with read replicas: $700-1,200/month
• Enterprise storage and CDN services: $400-600/month
• High-volume data transfer: $1,000-1,500/month
• Caching infrastructure (Redis/Elasticache): $200-300/month
• Comprehensive monitoring and security: $150-300/month

Total Monthly Cost: $3,000-5,000+

At this level, cost optimization requires dedicated resources. Without active monitoring and management, it’s easy to waste thousands monthly on idle resources, inefficient configurations, or unnecessary redundancy.

Hidden Costs and Common Surprises

Beyond the obvious infrastructure costs, several less visible charges often catch teams off guard:

• Data Transfer Fees: Outbound data transfer from AWS incurs charges at $0.09 per GB. For applications serving 5TB monthly, this represents $450 in transfer costs alone.
• CloudWatch Logging: Log storage costs $0.50 per GB. Verbose debug logging left enabled in production can generate $100-200 in monthly charges for data that is rarely accessed.
• Database Snapshots and Backups: Automated snapshots accumulate storage charges over time. Organizations routinely waste $300+ monthly on year-old backups that were never deleted.
• NAT Gateway Costs: Required for secure VPC architecture, NAT Gateways cost $32/month base fee plus data processing charges, often totaling $100-200/month.
• Load Balancer Operations: Application Load Balancers start at $16/month but scale with traffic volume. Budget at least $40-60/month for production workloads.

Best Practice: Configure billing alerts immediately. Set thresholds at $100, $250, and $500 to receive notifications before costs exceed budgets. Proactive monitoring prevents surprise charges.

Five Critical Cost Management Mistakes

Based on optimization work with numerous companies, these patterns consistently lead to unnecessary expenses:

1. Continuous Operation of Development Environments. Development and staging servers do not require 24/7 availability. Implementing automated shutdown during non-business hours immediately saves $200-400 monthly.
2. Premature Infrastructure Scaling. Enterprise-grade infrastructure is unnecessary for early-stage products. Begin with minimal resources and scale incrementally based on actual demand rather than projected capacity.
3. Neglecting Reserved Instance Savings. After six months of stable operation, transitioning to reserved instances reduces compute costs by 40-60% with no change in performance or capabilities.
4. Accumulation of Obsolete Resources. Old logs, database snapshots, and unused storage volumes accumulate over time. Monthly cleanup routines typically reduce storage expenses by 30%.
5. Inadequate Resource Tagging. Implementing consistent tagging for project, environment, and ownership enables efficient identification and elimination of orphaned resources consuming budget unnecessarily.

Effective Cost Control Strategies

These proven strategies help maintain cost efficiency:

• Right-Size from the Start: Begin with minimal infrastructure adequate for current needs. Scale based on actual usage patterns rather than anticipated requirements.
• Eliminate Idle Resources: Conduct weekly reviews of active resources. Terminate services that have remained idle for 30+ days.
• Implement Intelligent Storage Tiering: S3 Intelligent-Tiering automatically migrates infrequently accessed objects to lower-cost storage classes, reducing storage expenses by 40-50%.
• Optimize Instance Sizing: AWS Compute Optimizer analyzes utilization patterns and recommends appropriate instance sizes. Most organizations can reduce compute costs by 30% through proper sizing.
• Leverage Content Delivery Networks: For applications serving significant file volumes, CloudFront CDN typically reduces data transfer costs enough to offset its own fees.
• Establish Regular Cost Reviews: Weekly five-minute bill reviews identify cost anomalies before they escalate into significant problems.

AWS Pricing Models Comparison

AWS offers three distinct pricing models for compute resources:

• On-Demand Pricing: Maximum flexibility with no commitments, billed hourly. Ideal for initial development and testing phases where requirements remain uncertain.
• Reserved Instances: One or three-year commitments offering 40-60% discounts. Appropriate once application stability and baseline resource requirements are established.
• Spot Instances: Up to 90% discount on unused capacity, but AWS may terminate instances with two minutes notice. Suitable for fault-tolerant batch processing, not production databases.

Recommended Approach: Begin with on-demand pricing during initial development. Transition to reserved instances after 6-12 months once usage patterns stabilize. Use spot instances exclusively for development environments and batch workloads where interruption is acceptable.

Recommended Initial Infrastructure Stack

For most B2B SaaS applications, this configuration provides a solid foundation:

• Compute: 1-2 t3.small EC2 instances
• Database: Small RDS PostgreSQL instance with automated backups
• Storage: S3 with Intelligent-Tiering enabled
• Content Delivery: CloudFront distribution for static assets
• Monitoring: CloudWatch with conservative logging configuration
• Security: IAM policies, encryption at rest and in transit, AWS GuardDuty

Expected Monthly Cost: $150-250

This architecture comfortably handles thousands of users, scales efficiently as demand increases, and maintains financial sustainability during growth phases.

For assistance with infrastructure planning and implementation, explore our AWS consulting services, where we help organizations build cost-efficient, scalable cloud environments.