Purchasing Option for AWS EC2
Amazon offers a variety of payment options for the EC2 instancesOn Demand Instances
Reserved Instances
Spot Instances
Hosts Dedicated
Special Instances
Reservations for capacity
AWS allows you to launch EC2 instances in shared or dedicated tenancy.
Reserved Instances for Light, Medium, and High Utilization are no longer available to purchase. They were part of the Previous Generation AWSEC2 purchasing model.
Pay for the instances and compute capacity per hour, depending on the number of instances you run
No up-front or long-term commitments
The demand can dictate how many instances are needed.
AWS tries to have On-Demand instances available, but there may be times when the instance is not possible to launch.
This is a great option for users who want the flexibility and low cost of EC2 without any long-term commitment or up-front payments
Applications that have unpredictable, short-term, or spiky workloads that can’t be interrupted
Applications being developed and tested on EC2 in their first ever release
Reserved Instances offers lower hourly running expenses by offering a billing discount of up to 75% and capacity reservation that is applied only to instances. There would never be an instance with insufficient capacity
The Reserved Instance is your only source of discount, so you can use the Reserved Instance at a discounted price. This allows you to predict the cost of the reservation over time.
Reserved instances work best when there is a consistent, heavy use. They can save you money over buying the hardware or running only On Demand instances.
Applications with predictable or steady usage are well-suited
Applications that require reserved capacity
To reduce their computing costs, users can make upfront payments
Reserved instance does not refer to a physical instance that is launched. It is a billing discount that is applied to the use Of-Demand Instances
To qualify for the billing discount, On-Demand Instances need to match certain attributes such as instance type or region.
Reserved Instances are not automatically renewed. However, EC2 instances can still be used at On-Demand rates.
Auto Scaling and other AWS services are available to launch On-Demand instances that utilize the Reserved Instance benefits
Reserved Instances: You pay the entire term regardless of how you use it.
The reservation cannot be cancelled once it has been purchased. However, it can be sold in Reserved Instance Marketplace
Reserved Instance Pricing Tier Discounts only apply to AWS purchases, not to third party Reserved instancesReserved instance Pricing Key Variables
Instance attributes
Four instance attributes determine the price of a Reserved Instance.
Instance type: Instance Family + Instance Size e.g.m4.large is composed of the instance family(m4) and the instance size (large).
Region: The region in which the Reserved Instance was purchased.
Tenancy: Your instance can run on either shared (default) and single-tenant hardware (dedicated).
Platform: Operating system, such as Windows or Linux/Unix. Term commitment
Reserved Instance can either be purchased for a 1-year or 3-year commitment. The three-year commitment offers a greater discount.
One-year: A year is 31536000 seconds (365 Days).
Three-year: Three years can be defined as 94608000 seconds (1095 Days).
No upfront payment required. The account is charged at an hourly rate, regardless of usage.
Only available for 1-year reservations
Partial UpfrontA portion is paid upfront, and the rest of the term is charged at an hourly discount rate regardless of usage
Full UpfrontFull payment must be made at the beginning of the term. There are no additional costs for the remaining term, regardless of whether there is any usage
Standard: Offer the largest discount, bu
