? Amazon EC2 Pricing Models

Amazon EC2 offers several flexible pricing options to suit different use cases and budgets.

1?? On-Demand Instances

• Pay-as-you-go model — charged per second or hour.

• No long-term commitment.

• Ideal for: short-term, unpredictable workloads.

? Pros:

• No upfront cost

• Flexible and simple to use

? Cons:

• Most expensive option if used continuously

? Example: Testing, dev environments, or spikes in traffic

2?? Reserved Instances (RI)

• Commit to 1 or 3 years for a major discount (up to 72%).

• Choose:

  • Standard RI – Most savings, no changes allowed

  • Convertible RI – Change instance types over time

? Pros:

• Huge savings for predictable workloads

? Cons:

• Less flexibility (you're locked in)

? Example: Web servers, databases with steady usage

3?? Spot Instances

• Buy unused EC2 capacity at up to 90% discount.

• Can be interrupted by AWS with 2 minutes' notice.

? Pros:

• Cheapest option

? Cons:

• Can be terminated anytime

? Example: Batch processing, rendering, machine learning training

4?? Savings Plans

• Commit to a certain $ per hour of EC2 usage for 1 or 3 years.

• Applies across instance types, families, regions, and OS.

? Pros:

• Flexible and saves up to 72%

• Easier than Reserved Instances

? Example: Long-term apps with variable instance needs

5?? Dedicated Hosts

• Physical servers dedicated to you.

• Required for licensing scenarios (e.g., Bring Your Own License - BYOL).

? Pros:

• Compliance and licensing control

? Example: Oracle/Windows licensing, security-compliant workloads

? Additional EC2 Pricing Factors

? Tips to Save on EC2 Costs

? Use Auto Scaling to stop idle instances
? Choose Graviton instances for better price-performance
? Use Spot Instances for fault-tolerant workloads
? Analyze usage with Cost Explorer
? Set alerts and budgets in Billing Dashboard

? Summary Table