Pricing Models for Amazon EC2
There are multiple ways to pay for EC2 instances, when we create an EC2 instance in AWS, by default it launches the instance with an on-demand pricing model.
But do you know AWS also provides other pricing models for Amazon EC2 instances?
On-Demand Instances
Reserved Instances
Spot Instances
Dedicated Hosts
Saving plan (other AWS compute usage including EC2 instances, Lambda, and Fargate)
On-Demand Instances
This is the simplest pricing model, where you pay per hour or per second for the instance you use. It is a good option for short-term, unpredictable workloads, or when you need to get started quickly.
Spot Instances
Spot Instances are unused EC2 capacity that Amazon makes available at steep discounts (up to 90% off compared to On-Demand prices). However, Spot Instances can be interrupted by Amazon with 2-minute warning if the capacity is needed for other purposes. This makes them a good option for fault-tolerant workloads that can be restarted without impacting the overall outcome.
Reserved Instances
Reserved Instances offer significant discounts (up to 75% off On-Demand prices) in exchange for a commitment to use an instance for a one or three-year term. This is a good option for predictable workloads where you know you will need the instance for an extended period.
Dedicated Hosts
Dedicated Hosts provide dedicated physical servers for your EC2 instances. This offers the highest level of performance and isolation, but it is also the most expensive option. Dedicated Hosts are a good option for mission-critical workloads that require the highest levels of security and performance.
Amazon EC2 Pricing Plans Comparison
| Pricing Model | Pros | Cons |
| On-Demand | Least commitment, flexible | More expensive |
| Spot | Up to 90% discount | Can be interrupted |
| Reserved | Up to 75% discount | Requires commitment |
| Dedicated | Most isolated, dedicated hardware | Most expensive |