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AWS - EC2 Instance purchasing options

vnoitkumar profile image Vinoth Kumar ・2 min read

Amazon EC2 provides purchasing options to enable you to optimize your costs based on your needs.

EC2 Launch types

On-Demand Instances

  • Pay, by the second, for the instances that you launch.
  • No longer-term commitments or upfront payments are needed.
  • You have full control over its lifecycle, you decide when to launch, start, stop, reboot, or terminate it.
  • You pay only when your On-Demand Instances are in the running state.
  • Can increase or decrease your compute capacity.

Reserved Instances

  • Up to 75% savings compared to On-Demand Instance pricing.
  • You can purchase a Reserved Instance for a one-year or three-year commitment, with the three-year commitment offering a bigger discount.
  • Commitment includes instance type and Region.
  • Reserved Instances do not renew automatically; when they expire, you can continue using the EC2 instance without interruption, but you are charged On-Demand rates.
  • After you purchase a Reserved Instance, you cannot cancel your purchase. However, you may be able to modify, exchange, or sell your Reserved Instance if your needs change.

Scheduled Reserved Instances

  • Purchase instances that are always available on the specified recurring schedule.
  • Recur on a daily, weekly, or monthly basis, with a specified start time and duration.
  • You pay for the time that the instances are scheduled, even if you do not use them.
  • After you purchase a Scheduled Instance, you can't cancel, modify, or resell your purchase.
  • You must purchase a Scheduled Reserved Instance minimum for one year.
  • The minimum required utilization is 1,200 hours per year.

Spot Instances

  • The most cost-efficient instance in AWS. Up to 90% savings compared to On-Demand Instance pricing.
  • Request unused EC2 instances, which can reduce your Amazon EC2 costs significantly.
  • Instances that can "lose" at any point of time if your max price is less than the current spot price.
  • Well-suited for batch jobs, background processing, and optional tasks. Not good for critical jobs.

Dedicated Hosts

  • Pay for a physical host.
  • Physical server with EC2 instance capacity fully dedicated to your use.
  • Full control of the Instance placement.
  • Visibility into the underlying socket, the core of the hardware.
  • You must purchase a Dedicated Hosts Instance minimum for one year.

Dedicated Instances

  • Pay, by the hour, for instances that run on hardware that's dedicated to a single customer.
  • May share hardware with other instances from the same AWS account.

Great combo

Reserved Instance for baseline + On-Demand and Spot Instances for scaling.


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