AWS Outposts: What You Need to Know to Get Started

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Cloudticity, L.L.C.

With cloud migration picking up speed as time goes by, many more organizations are starting to enjoy the huge benefits of moving their local data processing into the cloud.

Moving away from on-premises systems gives companies nearly limitless storage capacity without the physical space requirements of on-premises data centers.

For some companies, there are reasons that moving completely into the cloud isn’t an option. Typically various regulatory and industry standard compliance reasons dictate that at least some local data processing is necessary. 

So how do these companies leverage the power of the cloud in on-premises data centers? One answer is found using AWS Outposts.

In this article, we’ll talk about exactly what AWS Outposts are, how much they cost, and how they are best used by organizations of different types as part of their hybrid cloud strategy.

What are AWS Outposts?

Simply put, AWS Outposts are a fully managed infrastructure that is physically located on the premises of a business, company, or organization.

It’s a hybrid cloud strategy that leverages the same AWS infrastructure that you would get as part of AWS Cloud Services, while still keeping the actual equipment in-house for compliance.

You can run native AWS services on-premises. However, you can also access services in the local AWS region. This makes it a great hybrid cloud approach for companies that need the best of both worlds.

Why do Companies Need to Keep Their Data Center Onsite?

There are a variety of reasons that companies may need to keep data on-site using a hybrid cloud approach. The good news is that no matter the reason, AWS Outposts can provide an on-premises solution that provides a truly consistent hybrid experience. So what are some of the barriers to moving fully to the cloud?

Legacy Applications or Architecture

For one, they may have legacy applications that require an on-premises solution. They may not be compatible with the cloud, or not function reliably when moved off-site.

Cloud Expenses

Moving massive amounts of data from on-premises data storage to the cloud comes at a large cost. This cost may be a bit much to ingest at one time. A hybrid on-premises solution using AWS Outposts may achieve the same results at a lower cost. 


Some companies require extremely low latency, high-performance applications. For them, moving completely to the cloud may not be the best idea. Low latency access is best achieved when data stays on the local network. This is especially important in intensive data analytics, graphic processing, or video rendering applications.

Some situations where a large amount of data from Internet of Things (IoT) devices is being collected and utilized are especially geared towards the type of local storage resources that AWS Outposts provide.

This situation might be seen in high-frequency trading, large retail stores, or even branch offices, for instance.

The physical location of a business may also dictate a move to AWS Outposts. One example is a business located in a place where high bandwidth public internet is unavailable.

If the internet connection can’t support moving large amounts of data, it may need to be kept on-premises. An AWS Outpost provides the speed and reliability to make this happen.


Some situations require taking intensive security measures to protect data. One example is healthcare organizations that are collecting large amounts of protected health information (PHI). 

Defense contractors or government agencies that are working with classified, secret, or top-secret information may need to have servers on-premises and fully air-gapped. 

This is one of the best use cases for AWS Outposts. The solution can enhance security by keeping data in an on-premises environment while still being able to utilize the combined fully managed services available from AWS services.

Regulatory Compliance

Certain industries, such as healthcare, financial services, and government contractors, need to meet stringent data protection requirements. Using AWS Outposts allows them to meet data residency requirements, while still reaping the huge benefits of a fully managed service.

When data is kept locally, it’s also easier to trace and log data. This is important to maintain an audit trail that can be viewed by anyone who needs to verify compliance.

Some countries may have rules that prohibit storing data across borders. This is the case in Germany, for instance, and may become the law elsewhere. AWS outposts meet this requirement for keeping data in the country, while still allowing for robust global operations.

Operations Resilience

While most locations in the US support a fairly reliable internet connection, there are some situations where the reliability of a network connection is a huge concern.

For example, banks and financial institutions may be concerned about losing connection during transactions. Similarly, healthcare providers may not be able to care for patients if they lose access to data.

In these situations, keeping essential data on-premises is the preferable solution. This way, they know they can access what they need at all times.

AWS Outposts allows them to utilize the APIs and tools they need to improve their operations, while still having the reliability of the on-premises data storage.

What are the benefits of AWS Outposts?

While having to dedicate physical space for housing the AWS Outposts servers will require some level of expense over a purely AWS cloud experience, for many companies, this is a tradeoff that is well worth it. Let’s look at some of the benefits of using AWS Outposts.

Ability to Run AWS Services On-Premises

As we’ve explored above, the primary benefit is the ability for companies to take advantage of AWS Services on-premises. This includes all the tools and APIs that make AWS a popular choice for so many companies.

Fully Managed Infrastructure

One of the main reasons that drive companies away from a complete on-premises IT solution and towards the cloud is that managing data centers is a huge drain on resources. Whether it's AWS, Azure, or Google Cloud, having a fully managed infrastructure is a much more efficient way of doing business.

The hybrid approach of AWS outposts means that AWS Services will handle all of the maintenance and resource management of the servers. This leaves company IT staff to focus on tasks that align with the organizational mission and increase profitability.

Truly Consistent Hybrid Experience

AWS is known for its excellent hardware infrastructure. We’ll discuss the details later in this article. The key is that AWS Outposts allows the use of the same hardware, AWS Console, APIs, and developer tools that are available in a full AWS Services solution.

AWS Outposts Rack vs. AWS Outposts Servers: Which is Right for Your Company?

AWS offers a couple of different form factors regarding AWS Outposts. The decision comes down to how many locally supported services your company needs, as well as some other factors that may be locally and company-specific.

Of course, the best place to start to make a decision is to consult directly with an AWS Sales representative. They can go over your company’s specific requirements and give you an idea of what the finished product would look like.

AWS Outposts Rack

The Outposts Rack supports the highest number of locally supported services, and the most networking options. They are also the more “plug and play” of the two solutions. Let’s take a deep dive into some of the specifics.

Each AWS Outposts rack is 80 inches high by 24 inches wide, by 48 inches deep. What’s appealing to many companies is that the racks come completely assembled. They are simply rolled into position, and installation is completed by AWS personnel.

They support the highest number of AWS Services including:

  • Amazon Elastic Compute Cloud (EC2)
  • Amazon Elastic Block Store (EBS)
  • Amazon Simple Storage Service (S3)
  • Amazon Relational Database Service (RDS)
  • Amazon Elasticache
  • Application Load Balancer (ALB)
  • VMware Cloud.
  • Other AWS Services.

What’s great is that the most important services can be chosen to run locally, then others can be run by connecting to the AWS region.

The AWS Outposts Rack supports 1, 10, 40, and 100 Gbps uplinks. It includes all the integrated networking gear. It also supports Local Gateway, as long as you install the Border Gateway Protocol over a routed network. 

Power can be configured in 5, 10 or 15KVA arrangements. There’s also a centralized redundant power conversion unit and DC distribution system.

The typical use case for AWS Outposts rack is one where low latency is essential. Some companies may not be close enough to public cloud servers to meet the extremely demanding latency requirements for gaming, or medical diagnostics, for instance.

They also fit in well with situations where legacy components can’t be moved to the cloud, and must communicate with AWS Services.

AWS Outposts Servers

The AWS Outposts Servers are not quite as full-featured as the AWS Outposts Racks. They are still an excellent choice, however, and provide a high level of service at a slightly lower cost by making some performance and feature tradeoffs.

The AWS Outposts servers themselves are made to fit in standard EIA-310 cabinets. There are two models: the 1U server is 24 inches deep. The 2U server is 30 inches deep.

Both servers take advantage of top-of-the-line processing power. The 1U utilizes the AWS Graviton2 processor. The 2U uses a 3rd gen Intel Xeon Scalable Processor.

The servers are delivered to your company by AWS. However, it’s up to you to provide installation, either from your IT staff or by hiring a 3rd party company. All that you need to do is connect them to your network, and AWS handles provisioning resources automatically.

The list of locally supported services isn’t quite as long as it is with AWS Outposts Racks. You’ll still find services such as:

  • Amazon Elastic Compute Cloud (EC2)
  • AWS IoT Greengrass
  • Amazon Sagemaker Edge Manager.

The good news is that the Amazon Virtual Private Cloud can be extended to run certain AWS services locally. Like the AWS Outposts Racks, a broader range of services is available by connecting to the AWS region using AWS Direct Connect.

Networking uplink speeds are slightly more limited at just 1 and 10 Gbps. It does not come with the networking gear, so you’ll be on your own to purchase what’s required. It supports a more simplified network integration experience in the form of a local layer 2 presence.

The power requirements are lower than the AWS Outposts Rack at only 1-2 kVA of power, and it supports AC or DC options.

Use cases for the AWS Outposts Servers are situations where the primary objective is meeting data residency requirements.

It’s also useful for data lakes or machine learning model training. Users have been able to set up a consistent hybrid architecture that’s useful for processing data that is more difficult to migrate.

How Much Do AWS Outposts Cost?

The physical requirements of keeping AWS Outposts on-site aren’t the only important factor. Even more important may be the overall cost.

Of course, the cost must be balanced against many different factors to determine if it makes financial sense. For some companies, however, the final cost may make it simply out of reach.

AWS Outposts are purchased on a basis of three-year terms. AWS allows for making a full payment upfront, which keeps the total price at the lowest amount. It’s also possible to have the system installed with no upfront fees, but there will be financing charges to consider.

There is a range of costs depending on the exact configuration, but here are a few examples:

On the low end, a general purpose unit, good for POS or enterprise application, is $5407.78 per month with no upfront payment; $2503.60 with a $90,129.72 upfront payment, or $169,443.88 if paid in full. This means that paying upfront would save a company a bit more than $25,000 over the 3-year term.

For a middle-grade system appropriate for enterprise workspaces or retail POS would be $11,116.97 per month with no upfront payment; $5,146.74 with a $185,282.79 upfront payment, and $348,331.64 with full payment. This represents over $50,000 in savings by paying upfront. 

Finally, a top-of-the-line memory-optimized unit geared towards high-performance compute and storage workloads will cost $23.484.59 monthly, 10,872.49 per month with $413,020.38 upfront, or a $735,850.40 full prepayment. This means that paying upfront in this situation yields savings of well over $100,000.

The servers aren’t the only expense. If you need Amazon Elastic Block Storage (EBS) priced in the following tiers:

  • 11 TB of EBS is $3379.20 per month
  • 33 TB of EBS is $6758.40 per month
  • 55 TB of EBS is $8448.00 per month 

EBS is useful for certain applications, but not necessarily in others. For AWS Simple Storage Service (S3), the storage pricing ranges from:

  • 26 TB of S3 at $2662.40 per month
  • 96 TB of S3 at $9830.40 per month
  • 380 TB of S3 at $38912 per month

Pricing also varies by region. Pro tip: spend some time with your IT Team and all other departments to drill down on your exact needs. One of the huge benefits of AWS services is scalability, so determine what your needs are now, and where they might go in the future.

Based on these numbers, you can sit down with an AWS sales representative and configure a system that’s financially viable for your company.

Ordering Process

Start by taking a walk-through of the physical space in which you’ll be placing your Outposts servers. Working with your facilities team, you’ll want to make sure your company meets all the requirements found on the AWS website.

You’ll need to start by signing up for AWS Enterprise support, so make sure you factor that into your final budget.

Your final order is placed using the AWS Outposts console. There are standard configurations available, but they can also be customized. This is why it’s so important to go into this process having all the information you need in front of you.

Once your order is completed and paid for, you’ll find setup is extremely easy and support is readily available.

Final Word: Are AWS Outposts Right for Your Company?

If you need the security and reliability of on-site data with all the flexibility and scalability of hybrid cloud architecture, then AWS Outposts may be a great option for your company.

With flexible pricing and financing, there’s a good chance they will fit in with your budget and make a positive impact on efficiency and profitability.

Want to learn more about how Cloudticity can help you get started with AWS Outposts? Schedule a free consultation with a healthcare cloud specialist today.

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