EC2 Purchase Options

EC2 instances are available through different purchase options, allowing you to choose the most cost-effective or flexible solution for your needs.

1. On-Demand Instances
   • Overview: Pay for compute capacity by the hour or second, with no long-term commitment.
   • Use Case: Ideal for short-term, unpredictable workloads where you can’t predict usage patterns.
   • Pros: Flexible, no upfront costs, no long-term commitment.
   • Cons: More expensive compared to other options when used long-term.
2. Reserved Instances
   • Overview: Commit to a specific instance type for a 1- or 3-year term, in exchange for significant cost savings.
   • Use Case: Suitable for stable, predictable workloads or long-term projects.
   • Pros: Lower cost compared to On-Demand, capacity reservation, flexible payment options (all upfront, partial, or no upfront).
   • Cons: Requires commitment, less flexibility if needs change.
3. Spot Instances
   • Overview: Bid for unused EC2 capacity and run instances at a significantly reduced cost.
   • Use Case: Ideal for flexible, fault-tolerant applications like batch processing or big data jobs.
   • Pros: Cheapest option, significant savings (up to 90% off On-Demand pricing).
   • Cons: Instances can be interrupted with little notice if the spot price exceeds your bid, making them unsuitable for critical workloads.
4. Dedicated Hosts
   • Overview: Physical EC2 servers dedicated to your use, allowing you to run instances on your own isolated hardware.
   • Use Case: Compliance-heavy applications, or those that require a dedicated physical server for licensing purposes.
   • Pros: Full control over instance placement, compliance, and licensing.
   • Cons: More expensive, as you’re paying for the entire host regardless of instance usage.
5. Savings Plans
   • Overview: Flexible pricing plan offering significant savings (up to 72%) in exchange for a 1- or 3-year commitment.
   • Use Case: Ideal for users with consistent compute usage, regardless of instance family or region.
   • Pros: Flexible, lower cost than Reserved Instances, applies across EC2 and other services.
   • Cons: Requires commitment, not as specific as Reserved Instances in terms of instance types.

Summary

• On-Demand: Best for flexibility and short-term use, but more expensive.
• Reserved: Best for predictable, long-term workloads with lower costs.
• Spot: Best for flexible workloads with a budget, but with the risk of interruption.
• Dedicated Hosts: Best for compliance or licensing requirements, but more expensive.
• Savings Plans: Best for consistent usage across multiple services, offering flexible long-term savings.