Pricing Models for Amazon EC2

Pricing Models for Amazon EC2


3 min read

So, you've decided to dip your toes into the vast ocean of AWS. Before you dive further let's learn about EC2 pricing as this is the service probably you would be using the most. Choosing the right plan can save you a lot of money, so let's get started.

On-Demand: The Casual Date of Instance Types

I Perfect for beginners trying out things, spinning some instances for exploring. soon demand pricing got your back.

Think of it as the casual dating option in the AWS world – no strings attached, just pay for what you use.

Reserved Instance: The Long-Term Relationship

Ready to commit? Reserved Instances offer some billing discounts, like a long-term relationship with your cloud provider. There are two plans to choose from Standard and Convertible plans. And there is one thing to remember the longer you keep your money invested in mutual funds the higher it grows, the longer you commit, the bigger the discount. Just like relationships, it's all about finding the right fit!

Standard Reserved Instances: Know Your ABCs (Instance type, Platform, Tenancy, Regions)

Thinking of going standard? Make sure you know your ABCs – Instance type, Platform (operating system), Tenancy, and Regions. Once you're clear on these, go ahead and swipe right on your Standard Reserved Instance. Because once you commit there is no going back.

Convertible Reserved Instances: Flexibility

If you're not sure about the region or want some flexibility in the commitment, like Ross and Rachel (They were on a break) then go for Convertible Reserved Instances

EC2 Savings Plan: The Budget-Friendly Saver

I need to save some more. The EC2 savings plan can cut down your server cost up to 72% and who doesn't love a good discount?

To reduce your EC2 instance running cost you make an hourly spend commitment to an instance family and region for a 1 or 3-year term. Any usage up to the committed amount is charged at a discounted rate (for example, $10 per hour). Any usage more than your commitment will be charged by regular on-demand pricing.

Note: Once your term is completed your instances remain uninterpreted and you are charged by regular on-demand pricing.

Spot Instances: The Wild Card

As the subtitle suggests these instances are like wild cards. These instances run on unused computing capacity on AWS thus they provide handsome discounts up to 90%.

Once AWS requires the computing capacity it will shut down your instance unlike your ex who left you without any notice, amazon will inform you a few minutes before it will shut the instance down.

These instances are not ideal for regular servers that need zero downtime. These are perfect for running some errands like batch work or background processes that can be started and stopped at any moment and can be resumed from where you stopped.

Dedicated Hosts: The VIP Experience

Dedicated Hosts give you the VIP treatment – fully dedicated servers, but at a hefty price. Close the instance once your work is done if you don't want to go bankrupt.

This is the most expensive option out there, and you get the services for the price you pay there.

You should go with this option because of some compliance issues where the data you are processing can't be shared on machines between different users.


In conclusion, AWS instance pricing is like a menu at a fancy restaurant – diverse, with options for every taste and budget. Happy cloud computing, and may your AWS bills be ever in your favor!

Did you find this article valuable?

Support Geek Aid by becoming a sponsor. Any amount is appreciated!