AWS - EC2 Instance purchasing options

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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