Is your CloudWatch bill growing faster than your user base? For many high-growth engineering teams, logging is a hidden cost gotcha that often represents up to 30% of an entire monthly AWS bill.
Understanding the four pillars of CloudWatch Logs pricing
AWS CloudWatch Logs pricing operates on a consumption-based model, meaning you only pay for what you actually use. While this sounds efficient, the automated nature of logs generated by services like Lambda or RDS means expenses can spiral before your next AWS Cost Explorer review. Understanding how ingestion, storage, and queries interact is the only way to prevent your monitoring costs from outstripping your production spend.
Data ingestion as the primary driver
Ingestion is typically the heaviest line item on your observability bill. In standard regions like us-east-1, AWS charges $0.50 per GB of data collected the moment your application sends a log event to the service. While the AWS Free Tier includes 5 GB of free ingestion each month, most production environments blow through this limit within hours. For teams managing high-volume microservices, this $0.50/GB rate becomes a significant liability if log levels are not strictly managed.
Archival storage and the long-tail effect
Once logs are successfully ingested, they are stored indefinitely by default. AWS charges $0.03 per GB per month for this archival storage in us-east-1. Although this rate appears low compared to ingestion, the “zombie” effect of never expiring logs can lead to thousands of dollars in cumulative costs over several years. Without a strategy to expire or transition old data, you are essentially paying a permanent tax on your historical errors and warnings.
CloudWatch Logs Insights queries
Analyzing your data also carries a price tag. Unlike platforms that charge per seat, CloudWatch Logs Insights charges based on the volume of data scanned during a query at a rate of $0.005 per GB. If your team frequently runs broad, unoptimized queries across terabytes of historical data to troubleshoot an incident, your analysis costs can quickly rival your ingestion costs.
Data protection and vended logs
AWS provides specialized pricing for “Vended Logs,” which are generated by native services like VPC Flow Logs or Route 53. These often include volume discounts or different base rates. Additionally, if you enable data protection policies to mask personally identifiable information (PII), you will incur an extra charge of approximately $0.12 per GB for the data scanned during the masking process.
The 2025 Lambda log tiering update
Starting May 1, 2025, AWS is introducing tiered pricing for Lambda logs to support high-volume users. This new structure follows a declining scale based on monthly volume:
- The first 10 TB of ingestion costs $0.50 per GB.
- The next 40 TB of ingestion drops to $0.25 per GB.
- Any volume over 50 TB monthly is charged at $0.05 per GB.
A critical nuance for FinOps teams is that this tiering applies per AWS account rather than being aggregated across your entire organization. This creates a specific incentive to evaluate your cost allocation and tagging strategies. If you spread your logs across hundreds of sub-accounts, you may end up paying the maximum rate on each rather than hitting the volume discounts available at the top levels.
Visualizing a typical monthly bill
To understand how these variables combine, consider a mid-sized SaaS company processing 5 TB of logs per month with 20 TB of historical logs already in storage. In a typical month, ingestion would cost $2,500, while storage adds another $600. Even with a modest $10 in query fees, the total bill reaches $3,110.
In this scenario, ingestion represents over 80% of the total spend. If an engineer accidentally enables “DEBUG” logging across the fleet, that 5 TB could easily jump to 50 TB, ballooning the monthly bill to over $25,000. Utilizing an AWS Pricing Calculator guide can help you model these “worst-case” scenarios before they appear on your invoice.
Common CloudWatch cost traps
Monitoring your spend is useful, but proactive optimization is necessary to maintain a healthy margin. Several common pitfalls frequently lead to unnecessary CloudWatch expenses:
- The “Never Expire” Trap: Most log groups have no retention limit by default, even though application logs often lose their diagnostic value after 30 days. You should configure retention policies early to automatically expire logs or move them to S3 Glacier for long-term compliance.
- Verbose Logging in Production: Running production environments at “INFO” or “DEBUG” levels is an expensive habit. It is often more cost-effective to use metric filters to extract specific data points into CloudWatch Metrics rather than storing thousands of raw log lines.
- Cross-Region Data Transfers: Streaming logs from a resource in one region to a centralized log group in another will trigger AWS egress costs. Aim to keep logging traffic within the same region to avoid these extra data transfer fees.
- Orphaned Log Groups: When infrastructure stacks are deleted, they often leave behind the log groups they created. Performing regular audits with AWS Trusted Advisor can help identify these abandoned resources.
Moving from manual audits to automated savings
Managing CloudWatch costs manually is a treadmill that most engineering teams cannot afford to stay on. While setting AWS Budgets provides a necessary safety net, it does not fix the underlying infrastructure inefficiencies that cause your bills to climb in the first place.
Hykell takes the burden of cost management off your DevOps team by providing automated cloud cost optimization. We go beyond simple visibility; our platform actively identifies underutilized resources, optimizes your EBS and EC2 configurations, and helps you navigate complex AWS rate optimization strategies without requiring manual engineering effort.
By operating on a performance-based model, Hykell ensures that you only pay a slice of the actual savings we generate. Our platform typically reduces total AWS costs by up to 40% on autopilot, allowing your team to focus on innovation rather than billing. Stop guessing what your observability bill will look like next month and book a free cost audit with Hykell to uncover your hidden savings today.