On-demand is a pay-as-you-go (PAYG) model, where you consume compute and then you pay.
When you launch an EC2 instance it is by default using On-Demand Pricing.
On On-demand model you are charged by the second or the hour.
Reserved Instance (RI) are designed for applications that have a steady-state, predictable usage, or require reserved capacity.
RI is reduced in pricing based on the following:
Term - the longer the term the greater the savings
Class - the less flexible the greater the savings
RI Attributes
Payment Options - the greater upfront you give the greater the savings.
RI Attributes (Instance Attributes) are limited based on Class Offerings and can affect the final price of RI instances.
The 4 RI Attributes:
Instance Type - this is composed of the instance family and the instance size.
Region - in which region the reserved instance is purchased.
Tenancy - whether your instance runs on shared or single-tenant hardware.
Platform - what operating system was used (Linux or Windows).
Regional RI means you purchased for a Region.
Zonal RI means you purchase for an Availability zone.
RI Limits is a limit to the number of Reserved Instances that you can purchase per month.
Per month you can purchase:
20 Regional Reserved Instances per Region.
20 Zonal Reserved Instances per AZ.
Regional Limits is where you cannot exceed your running On-demand instance limit by purchasing regional reserved instance.
Zonal Limits is where you can exceed your running On-demand instance limit by purchasing zonal Reserved Instances.
Capacity Reservations is when EC2 instances are backed by different kind of hardware, and so there is a finite amount of servers available within an Availability Zone per instance type or family.
Capacity Reservation is a service of EC2 that allows you to request a reserve of EC2 instance type for a specific region and AZ.
Standard RI is where the RI attributes can be modified.
Convertible RI is where RI attributes cannot be modified instead you perform an exchange.
RI Marketplace allows you to sell your unused Standard RI to recoup your RI Spend for RI you do not intend or cannot use.
Spot Instances is when AWS has unused compute capacity that they want to maximize the utility of their idle server.
Spot Instances provide a discount of 90% compared to on-demand pricing because instances can be terminated anytime when capacity is needed.
Dedicated Instances is designed to meet regulatory requirements.
Dedicated Host is used when you have string server-bound licensing that won't support multi-tenancy or cloud deployments.
Multi-tenant is when multiple customers are running workloads on the same physical hardware and only separated via virtual isolation.
Single Tenant is when a single customer has dedicated hardware and is physically separated from other hardwares.
Savings Plan is an offer similar to Reserved Instances but simplifies the purchasing process.
3 Types of Savings Plan:
Compute Savings Plan
Ec2 Instance Savings Plan
SageMaker Savings Plan
Compute Savings Plan provide the most flexibility and help to reduce your costs by up to 66%
EC2 Instance Savings Plan provide the lowest prices, offering savings of up to 72% in exchange for commitment of usage of individual instance families in a region.
SageMaker helps you reduce costs by up to 64% and is applied for SageMaker usage.