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You are correct in your approach and cost estimation for transitioning your S3 objects from Standard to Intelligent-Tiering storage class.
Using an S3 Lifecycle rule is indeed the recommended method for transitioning a large number of objects between storage classes. For transitioning objects from S3 Standard to S3 Intelligent-Tiering, there is a charge of $0.01 per 1,000 objects.
Given your bucket contains 1.2 billion objects, the calculation would be:
(1,200,000,000 / 1,000) * $0.01 = $12,000
So your estimate of $12,000 for the transition cost is accurate.
It's worth noting that while this is a one-time cost for the transition, it can lead to significant long-term savings, especially for infrequently accessed data. S3 Intelligent-Tiering automatically moves objects between access tiers based on usage patterns, which can optimize your storage costs over time.
However, keep in mind that objects smaller than 128 KB are not eligible for auto-tiering and will be charged at the frequent access tier rates. If you have a large number of small objects, you may want to consider this in your cost-benefit analysis.
Also, remember that S3 Lifecycle rules typically run once per day, so the transition of such a large number of objects may take some time to complete. The charges will be incurred as the objects are transitioned.
Given the scale of your operation, you might want to consider implementing the transition in phases or exploring other optimization techniques, such as object compression or concatenation, to potentially reduce the number of objects and associated transition costs. However, these approaches would require additional planning and implementation effort.
Sources
Analyze access patterns and use the most cost-effective Amazon S3 storage class | AWS Storage Blog
Using S3 Intelligent-Tiering - Amazon Simple Storage Service
Transitioning objects using Amazon S3 Lifecycle - Amazon Simple Storage Service
Optimizing Storage Costs by Transitioning Millions of S3 Objects from Standard to Glacier Tier | AWS re:Post
+1 for
And you won't be charged the transition cost for any such objects.