EC2 Pricing Models

The 5 models

Model	Discount	Commitment	Use when
On-Demand	0%	None	Short-term, dev/test, experiments, unpredictable
Reserved (RI)	up to 72%	1-3 yr, SPECIFIC instance/region	Predictable steady 24/7 production
Savings Plans	up to 72%	1-3 yr, SPEND LEVEL ($/hr)	Predictable spend WITH flexibility (any instance counts)
Spot	up to 90%	None (evictable, 2-min warning)	Batch, stateless, restartable work
Dedicated Host	~on-demand	Optional (RI)	BYOL licensing (Oracle/MS), compliance

Key mechanics

Reserved: pick instance type + region + term + payment (No/Partial/All Upfront). Convertible RI = can change type (smaller discount).

Savings Plans = spend-floor commitment, NOT a cap:

Commit $50/hr → every instance up to $50/hr value gets ~60% off
Usage $30/hr → still pay $50 (wasted $20)
Usage $80/hr → pay $50 discounted + $30 full price

• Compute SP: any instance, any region, any family (flexible, smaller discount)
• EC2 Instance SP: specific family in region (bigger discount, RI-like)
• Analogy: gym membership (commit monthly, per-class cheaper) vs pay-per-visit (On-Demand)

Spot = reverse surge pricing:

• Cheap when AWS has spare capacity, evicted with 2-min warning when demand rises
• NOT for DBs/stateful — batch, CI/CD, ML training (with checkpoints), stateless web
• No end-time commitment — eviction is the only end

Dedicated Host = exclusive physical server (still AWS-owned):

• You pay whole host, no shared tenants
• For BYOL software licensed per core/socket
• Dedicated Instances (simpler variant): dedicated hardware, no BYOL

Mixed fleet strategy (the real-world pattern)

Baseline (always-on)   → Reserved / Savings Plans (~60%)
Variable/spikes        → On-Demand (~20%)
Interruptible batch    → Spot (~20%)

Exam decision matrix

Scenario	Answer
Predictable 24/7, 3-yr	RI or Savings Plans
Predictable + flexible instance choice	Compute Savings Plans
Batch, can tolerate interruption	Spot
Dev/test short-term	On-Demand
Per-core licensed software	Dedicated Host
New app, unknown traffic	On-Demand first, move later

Related

• [[aws/index]]
• [[aws/ec2-instance-types/index]]