Cost Estimates, Worked Examples and Choosing a Host
Worked example: cloud hosting cost for an Indian online store through a festive sale
Illustrative cloud bill for an Indian online store through a festive sale with five times normal traffic: autoscaling vs sizing for the peak.
An online store's hosting bill is shaped by its busiest days. In this illustrative example, a direct-to-consumer store pays about ₹27,700 a month in normal months and ₹67,400 in the festive-sale month on public cloud with autoscaling, or about ₹3.73 lakh a year before GST. Sizing the servers for the peak all year would cost about ₹7.48 lakh, so autoscaling roughly halves the bill. The figures are illustrative to show the method, not quotes. This example belongs to the best-fit method.
The store
| Item | Assumption |
|---|---|
| Platform | Self-hosted e-commerce application with a managed database |
| Normal traffic | 1,50,000 visits a month |
| Festive sale | 10 days with about 5× normal traffic, for example around Diwali |
| Data transfer out | 600 GB in a normal month; 2,500 GB in the festive month |
| Availability | Two app servers in two zones behind a load balancer |
| Billing | INR invoice from the provider's Indian entity (no forex) |
Normal month (illustrative)
| Line | Basis | ₹ before GST |
|---|---|---|
| 2 app servers, 1-year commitment | ₹4,000 each | 8,000 |
| Managed database, with standby | Fixed size | 9,000 |
| Load balancer | Base + usage | 2,400 |
| Object storage + CDN for images | Product photos | 1,500 |
| Snapshots and backups | 14-day retention | 1,200 |
| 2 public IPs | ₹320 each | 640 |
| Data transfer out | (600 − 100 free) GB × ₹8 | 4,000 |
| Monitoring | Per server | 1,000 |
| Total | 27,740 |
The two app servers run all year, so committing to them for a year is reasonable. See on-demand, reserved and spot.
Festive-sale month (illustrative)
| Extra line | Basis | ₹ before GST |
|---|---|---|
| 6 extra app servers, on-demand, autoscaled | 6 × ₹6,000 × 10/30 days | 12,000 |
| Database moved up one size for the month | Double the normal size | 9,000 |
| Extra data transfer | (2,500 − 100) × ₹8 = 19,200, minus the normal 4,000 | 15,200 |
| Load balancer usage | More connections | 1,500 |
| CDN | More image traffic | 2,000 |
| Extra for the month | 39,700 |
Festive month total: ₹27,740 + ₹39,700 = ₹67,440.
The year
| ₹ before GST | With 18% GST | |
|---|---|---|
| 11 normal months × ₹27,740 | 3,05,140 | 3,60,065.20 |
| Festive month | 67,440 | 79,579.20 |
| Year | 3,72,580 | 4,39,644.40 |
The alternative: size for the peak all year
Some stores avoid the complexity of autoscaling by running eight app servers and the larger database all year.
| Monthly (₹, before GST) | |
|---|---|
| 8 app servers, committed, ₹4,000 each | 32,000 |
| Larger database | 18,000 |
| Load balancer, storage, backups, IPs, monitoring | 6,740 |
| Normal data transfer | 4,000 |
| Normal month | 60,740 |
Festive month: ₹60,740 + ₹15,200 extra data transfer + ₹1,500 load balancer + ₹2,000 CDN = ₹79,440. Year: ₹60,740 × 11 + ₹79,440 = ₹7,47,580 before GST, about ₹3.75 lakh more than the autoscaled design.
What the sale really tests
- Load testing. Test the autoscaling at 5× load two to three weeks before the sale. A failed scale-up during the sale costs more than the servers.
- Database limits. The database is often the bottleneck. Resize it before the sale, not during it.
- Payment and inventory systems. Third-party payment gateways and logistics APIs have their own limits.
- Images. A CDN cuts both cost and load on servers.
- Budget alerts. Set a separate alert for the sale month so that a misconfiguration (for example, servers that never scale down) is caught in a day. See budgets, alerts and tagging.
Illustrative cost of downtime. If the store sells ₹40 lakh during the 10-day sale, that is about ₹4 lakh a day or roughly ₹16,700 an hour. Three hours down at peak could cost more than the whole festive-month hosting bill.
Variations
| Change | Effect (illustrative) |
|---|---|
| Use spot servers for half of the extra capacity | Lowers the ₹12,000 line, with a risk of interruption |
| Run on a single larger VPS instead | Lower and fixed bill, but no headroom for 5× traffic and no zone redundancy |
| Use a hosted e-commerce platform instead | Hosting replaced by a subscription and transaction fees; different trade-offs |
| Billed in dollars by card | Add forex markup and an FX buffer; see USD vs INR billing |
Related guides
A store that cannot afford downtime should also price its recovery set-up; see backups and disaster recovery cost. If nobody in-house can run the autoscaling, see managed vs self-managed cloud.
FAQ
Do payment data rules require Indian hosting for my store?
RBI's 2018 payment data storage rule applies to payment system operators, not to merchants who use a gateway. Do not store full card data yourself; use the gateway's tokenisation. See Indian regions and data rules.
Should I commit to the extra servers too?
No. They run only a few days a year, so on-demand or spot is cheaper.
How early should I plan for the sale?
At least a month: load test, resize the database, raise account limits on servers and IPs if needed, and confirm support contacts.
Is egress really the second-largest extra?
In this illustration, yes. Image-heavy stores often find data transfer out grows fastest during sales.
Sources
- AWS EC2 on-demand pricing — 100 GB free data transfer out per month (checked 28 October 2026)
- Reserve Bank of India — payment data storage and tokenisation rules
- CBIC GST — GST on hosting
- CERT-In — incident reporting if a sale-time incident occurs
