Amazon EC2 Pricing

With Amazon EC2, the customer pays only for the compute time used. Amazon EC2 offers a variety of pricing options for different use cases. Below are the options :

On-Demand instances are ideal for short-term, irregular workloads that can’t be interrupted. No upfront costs or minimum contracts apply. The instances run continuously until the customer stops them, and only the compute time used is payed. Sample use cases for On-Demand instances include developing and testing applications and running applications that have unpredictable usage patterns. On-Demand instances are not recommended for workloads that last a year or longer because these workloads can experience greater cost savings using Reserved instances.

Reserved instances are a billing discount applied to the use of On-Demand instances in customer’s account. Customer can purchase Standard Reserved and Convertible Reserved Instances for a 1- or 3-year term, and Scheduled Reserved Instances for a 1-year term. 3-year option gives a greater cost savings. At the end of a Reserved Instance term, customer can continue using the Amazon EC2 instance without interruption, but charged with On-Demand rates, until customer does one of the following :

• terminates the instance
• purchases a new Reserved Instance that matches the instance attributes (instance type, region, tenancy, platform)

Spot instances are ideal for workloads with flexible start and end times, or that can withstand interruptions. Spot instances use unused Amazon EC2 computing capacity and offer cost savings at up to 90% off of On-Demand prices. Suppose there is background processing job that can start and stop as needed (such as the data processing job for a Customer survey). Customer wants to start and stop the processing job without affecting the overall operations of the business. If Customer makes the Spot request and Amazon EC2 capacity is available, the Spot instance launches, otherwise request remains unsuccessful until EC2 capacity is available. After the Spot instance is launched, if capacity is no longer available or demand for Spot instance increases, an instance may be interrupted. It should be considered when choosing an instance type.

Dedicated hosts are physical servers with Amazon EC2 instance capacity that is fully dedicated to customer’s use. Of all the Amazon EC2 options, Dedicated hosts are the most expensive.

AWS offers Savings Plans for several compute instances, including Amazon EC2. Savings plans enable to reduce compute costs by committing to a consistent amount of computer usage for 1- or 3-year term. This term commitment results in savings of up to 66% over On-Demand costs. Any usage up to the commitment is charged at the discount plan rate (for example, $10 an hour). Any usage beyond the commitment is charged at regular On-Demand rates.