Amazon Elastic Compute Cloud is a web Service that is provides resizable computer capacity in the cloud.
Amazon EC2 reduces the time required to obtain and boot new server instances to minutes, allowing you to quickly scale capacity, both up & down , as your computing requirements chages.
EC2 Pricing Models
- On Demand
- Reserved
- Spot
- Dedicated Hosts
1. On Demand
It allows to pay a fixed rate by the hour(or by the second) with no commitment.
Advantages of On Demand pricing:
- Users that want the low cost and flexibility of Amazon EC2 without any up-front payment or long-term commitment.
- Application with short term, spiky or unpridictable workloads that cannot be interrupted.
- Application being developed or tested on Amazon EC2 for the first time.
2. Reserved
Provides you with capacity reservation, and offer a significant discount on the hourly charge for an instance.
Contract terms are 1 year or 3 years.
Advantages of Reserved pricing:
- Application with steady state or predictable usage.
- Applications that require reserved capacity.
- Users able to make up-front payment to reduce their total computing costs even further.
3. Spot
Enables you to bid whatever price you wnat for instance capacity, providing for even greater savings if your applications have flexible start and end time.
Advantages of Spot pricing:
- Application that have flexible start and end times.
- Application that are only feasible at very low compute prices.
- Users with urgent computing needs for large amount of addittional capacity.
4. Dedicated Hosts
Physical EC2 server dedicated for your use.
Dedicated server can help in reducing the cost by allowing to use the existing server bound software licenses.
Advantages of Dedicated Hosts pricing:
- Useful for requirements that may not support multi-tenant virtualization.
- Great for licensing that does not support multi-tenancy or cloud deployments.
- Can be purchaged On-Demand(Hourly).
- Can be purchased as a reservation for up to 75% off the On-Demand price.