EC2 Instances Purchasing Options

⚡ EC2 Purchasing Options

AWS offers several ways to pay for EC2, each suited to a different workload pattern. Picking the right one matters for both cost control and the exam.

1️⃣ On-Demand

• What: Pay per second/hour, zero commitment.

• Best for: Short-term or unpredictable workloads, dev/test.

• Trade-off: Most flexible, but most expensive.

2️⃣ Reserved Instances (RI)

• What: Commit to a specific instance type for 1 or 3 years.

• Best for: Steady, long-running workloads (e.g. databases).

• Two flavors:

  • Standard — up to 72% off, but locked to instance type/OS/region/tenancy.

  • Convertible — up to 66% off, but you can change instance family/OS/tenancy.

• Payment: All/partial/no upfront — more upfront = bigger discount.

• Bonus: Unused RIs can be resold on the Reserved Instance Marketplace.

3️⃣ Savings Plans

• What: Commit to a fixed $/hour spend for 1–3 years (RI's more flexible successor).

• Best for: Long-term usage where instance size/family may vary.

• Discount: Up to ~70%, applies across instance sizes in a family, flexible OS/tenancy.

4️⃣ Spot Instances

• What: Bid on AWS's spare capacity for up to 90% off.

• Best for: Fault-tolerant, interruptible jobs (batch processing, analytics).

• Catch: Can be terminated anytime — never use for critical workloads.

5️⃣ Dedicated Hosts

• What: An entire physical server reserved just for you.

• Best for: Compliance needs or bring-your-own-license (BYOL) software.

• Pricing: Per-second on-demand, or reserved for up to ~70% off.

• Perk: Full visibility into sockets, cores, and host ID.

6️⃣ Dedicated Instances

• What: Runs on hardware dedicated to your account, but may share the physical server with your other instances.

• vs. Dedicated Hosts: Billed per-instance (plus a small regional fee) rather than per-host, and you lose host-level visibility/control — no targeted placement or host affinity.

7️⃣ Capacity Reservations

• What: Reserve guaranteed capacity in a specific AZ, no long-term commitment.

• Best for: Workloads that absolutely need capacity available when needed.

• Pricing: On-demand rate, billed whether you use it or not.

• Tip: Pair with RIs/Savings Plans to still get a discount.

🏨 Resort Analogy

💵 Example: m4.large, us-east-1

✅ Takeaways

• On-Demand → short-term / unpredictable

• RI or Savings Plan → steady, long-term

• Spot → cheap, interruption-tolerant

• Dedicated Host → compliance / BYOL

• Capacity Reservation → guaranteed availability in an AZ