Cut Data Transfer Costs with VPC Endpoints on AWS

When managing a cloud infrastructure on AWS, data transfer can be one of the most overlooked cost factors. High-data services such as Amazon S3, DynamoDB, or Kinesis generate significant traffic between your VPC and AWS services, which can quickly rack up charges if not optimized properly. Fortunately, one highly effective strategy is to leverage VPC Endpoints.

Furthermore, optimizing data transfers not only reduces expenses but also maintains high availability and security. In this guide, we explain how to avoid NAT Gateway charges and reduce data transfer fees between your VPC and AWS services. We also distinguish between Gateway Endpoints and Interface Endpoints and provide real-world cost examples along the way.

Why Data Transfer Costs Can Spiral Out of Control

Cloud data transfers incur charges that may seem negligible at first but can add up rapidly. For example, when your EC2 instances or VPC services interact with AWS services like S3 or DynamoDB, the data often flows through a NAT Gateway. This gateway bridges your private VPC and the internet, enabling communication with external services.

In addition, NAT Gateways charge for both data processing and data transfer. Even if you access native AWS services, misconfigured routing might force data to traverse the internet, resulting in extra fees. As a result, these costs can balloon, particularly in data-heavy applications.

Key reasons for high data transfer costs include:

• NAT Gateway Fees: Charges apply per GB for both processing and transfer.

• Misrouted Traffic: Data may leave your private network if routing is not optimized.

• Data-Heavy Workloads: Applications such as media streaming or big data analytics produce enormous traffic volumes.

Understanding these cost drivers is crucial for designing a more efficient and cost-effective architecture.

VPC Endpoints: Your Data Transfer Cost-Saving Heroes

VPC Endpoints enable a private connection between your VPC and supported AWS services without using the public internet or a NAT Gateway. Consequently, they help you drastically reduce data transfer costs while enhancing security.

Additionally, there are two main types of VPC Endpoints. Gateway Endpoints work with Amazon S3 and DynamoDB and provide a free route. In contrast, Interface Endpoints, powered by AWS PrivateLink, support a wider range of AWS services such as Kinesis, SNS, and CloudWatch.

Key benefits of VPC Endpoints include:

• Cost Savings: They eliminate costly NAT Gateway fees by keeping traffic internal.

• Enhanced Security: They reduce exposure by keeping data within the AWS network.

• Improved Performance: They lower latency by avoiding the public internet.

Integrating VPC Endpoints into your architecture not only cuts costs but also improves overall security and performance, providing a dual advantage for your cloud operations.

Deep Dive into Gateway Endpoints

Gateway Endpoints provide a direct, cost-free connection to Amazon S3 and DynamoDB. Without these endpoints, traffic between your VPC and these services flows through a NAT Gateway, which incurs extra charges. For instance, NAT Gateway fees for Amazon S3 are approximately $0.045 per GB for data processing and $0.09 per GB for data transfer.

To illustrate, consider a scenario where 100 TB (100,000 GB) of data transfers occur monthly. The expenses using a NAT Gateway would be:

• Data Processing: 100,000 GB × $0.045 = $4,500

• Data Transfer: 100,000 GB × $0.09 = $9,000

• Total: About $13,500 per month

In contrast, when you route traffic through a Gateway Endpoint for S3, AWS allows you to bypass NAT Gateway fees entirely, leaving you with only the standard S3 storage and request charges.

Key points on Gateway Endpoints:

• No Extra Charges: They allow free internal routing for S3 and DynamoDB traffic.

• Elimination of NAT Fees: They remove both processing and data transfer costs.

• Simple Setup: They are easily added to your VPC routing tables.

Thus, by enabling Gateway Endpoints, you can save up to $13,500 per month on data transfer fees, which translates to over $160,000 in annual savings.

The Power of PrivateLink (Interface Endpoints)

For AWS services that do not support Gateway Endpoints, you should use Interface Endpoints via AWS PrivateLink. These endpoints create a network interface in your VPC that connects directly to the target AWS service, thereby bypassing the NAT Gateway.

Consider an IoT platform that uses Amazon Kinesis. Suppose you process 50 TB (50,000 GB) of data monthly via a NAT Gateway. The costs might be:

• Data Processing via NAT Gateway: 50,000 GB × $0.045 = $2,250

• Data Transfer via NAT Gateway: 50,000 GB × $0.09 = $4,500

• Total: Approximately $6,750 per month

When you switch to an Interface Endpoint, the pricing changes. With an estimated cost of $0.01 per hour for the endpoint (about $7.20 per month) and $0.01 per GB for data transfer costs (50,000 GB × $0.01 = $500), the new total is roughly $507.20 per month. This change saves you over $6,200 monthly, which is more than $74,000 annually.

Key points for Interface Endpoints:

• Flexible Connectivity: They support services like Kinesis, SNS, and more.

• Lower Costs: They drastically reduce fees compared to NAT Gateway routing.

• Easy Integration: They offer private access via a VPC network interface.

Interface Endpoints not only reduce costs but also provide a secure, efficient method to access AWS services that lack Gateway Endpoint support.

Additional Data Transfer Cost Optimization Opportunities

Other AWS services can benefit from VPC Endpoints as well. For example, you can use endpoints for CloudWatch logs, SNS, SQS, and Secrets Manager to keep data transfers internal and avoid NAT Gateway fees.

Consider these tips for optimizing VPC Endpoint usage:

• Use Gateway Endpoints First: For S3 and DynamoDB, always start with Gateway Endpoints since they incur no additional cost.

• Monitor Usage: Utilize AWS Cost Explorer to track endpoint utilization.

• Consider Multi-Region Architectures: Replicate services across regions to avoid cross-region transfer fees and improve disaster recovery.

• Leverage VPC Peering or Transit Gateway: In multi-account environments, these options help reduce reliance on NAT Gateway traffic.

Implementing these best practices not only lowers costs but also enhances network security and performance.

👉 See Also: We wrote a fantastic guide on S3 cost optimization that can save your business a fortune!

Stop Overpaying for Data Transfer In AWS

In summary, data transfer costs can quickly spiral if your architecture routes traffic through NAT Gateways unnecessarily. By leveraging VPC Endpoints, whether using free Gateway Endpoints for S3 and DynamoDB or cost-effective Interface Endpoints for other services, you can drastically cut your monthly charges. Moreover, these endpoints enhance security by keeping traffic within the AWS network.

Reevaluate your architecture today to eliminate unnecessary NAT Gateway fees. Integrating VPC Endpoints is a straightforward configuration change that can save you tens of thousands of dollars annually. If you want an even easier solution, consider Spend Shrink’s No Hassle Anomaly Detection to monitor and optimize your cloud spend automatically.