EC2 Pricing models

Question 1

Define the pricing model for On-Demand Instances:

Answer 1

Hourly rate based on OS, size, options, etc.

Billed in seconds (60s minimum) or hourly (depending on the OS used).

Question 2

What is the default pricing model?

Answer 2

On-Demand Instances

Question 3

Is there any commitment when using on-demand instances?

Answer 3

No long-term commitments or upfront payments

Question 4

In which cases is recommendable to use on-demand instances?

Answer 4

• When having New or uncertain application requirements.
• Short-term, spiky, or unpredictable workloads which can’t tolerate disruption.

Question 5

Define the pricing model for spot Instances:

Answer 5

• Up to 90% off on-demand, but depends on the spare capacity of that instance type in particular region and AZ.
• You can set a maximum hourly rate in a certain AZ in a certain region.
• If the max price you set is above the spot price, you pay only that spot price for the duration that you consume that instance.
• As the spot price increases, you pay more.
• Once this price increases past your maximum, it will terminate the instance.

Question 6

In which cases is recommendable to use spot instances?

Answer 6

• Great for data analytics when the process can occur later at a lower use time.

Question 7

Define the pricing model for reserved Instances:

Answer 7

• Up to 75% off on-demand.
• The trade off is commitment.
• You’re buying capacity in advance for 1 or 3 years.
• Flexibility on how to pay

Question 8

What are the different paying methods when using reserved instances?

Answer 8

• All up front
• Partial upfront - you pay some amount of money up front, and then you pay a reduced hourly rate regardless of if an instance is running or not.
• No upfront

Question 9

How can you achieve the best discounts when using reserved instances?

Answer 9

Best discounts are for 3 years all up front.

Question 10

What types of reservation can you do when using reserved instances?

Answer 10

Reserved in region, or AZ with capacity reservation.

You can perform scheduled reservation when you can commit to specific time windows.

Question 11

In which cases is recommendable to use reserved instances?

Answer 11

Great if you have a known steady state usage, email usage, domain server.
Cheapest option with no tolerance for disruption.
For example, reserved instances can be used to have servers that need to be running all the time, these could coordinate and spin up other servers like spot instances when the price is down and operate in a very cost efficient way.