Skip to content

EC2 Instance Purchasing Options

Links: 101 AWS SAA Index

On Demand Instances

  • Short uninterrupted workload.
  • More expensive than spot and reserved.

Capacity Reservations

  • We can do a capacity reservation of on demand instances. There is no monetary benefit but there is a guarantee that you will have capacity when you need it. This is particularly useful when you know that you will be needing an instances for an uninterrupted workload at a particular time.
  • For monetary benefit you can use capacity reservation with savings plan.
  • If you want to make reservations in multiple AZs then you need to file multiple reservation requests.
  • The main benefit of capacity reservation over reserved instances is there is no need of 1 or 3 years of commitment.

Reserved Instances

  • Reserved Instances are not physical instances, but rather a billing discount applied to the use of On Demand Instances in your account.

Standard Reserved

  • 75% cheaper than on demand.
  • For stable applications like database.
  • Commitment of 1 (minimum) or 3 years. For 3 years you get more discounts.
  • Payment options are no upfront (no discount), partial upfront (discount +) and full upfront (discount +++)
  • We reserve a specific instance type.
  • Unused Standard Reserved Instances can later be sold at the Reserved Instance Marketplace.

Convertible Reserved

  • We can change the instance type.
  • Less cost savings as compared to normal reserved.
Convertible unused instances cannot be sold in the Reserved instance marketplace.

Scheduled Reserved

  • Scheduled Reserved Instances (Scheduled Instances) enable you to purchase capacity reservations that recur on a daily, weekly, or monthly basis, with a specified start time and duration, for a one year term.
  • Scheduled Instances are a good choice for workloads that do not run continuously but do run on a regular schedule. For example, you can use Scheduled Instances for an application that runs during business hours or for batch processing that runs at the end of the week.
The main difference between standard and scheduled reserved is that standard reserved reserves the instance for continuous use.


  • Highest discount 90% as compared to on demand.
  • Can lose them at any moment.
  • Suitable for batch jobs, data analysis etc.
  • We get a spot instance if current spot price < max spot price defined by us.
  • If current spot price is greater then instance has to be stopped or terminated. We have a grace period of 2 minutes.
  • Spot pricing can vary depending on AZ.

Dedicated Hosts

  • For compliance reasons and server bound software licenses (complex licensing, BYOL - Bring your own license).
  • 3 year reservation.
  • Billing per host.
  • With dedicated hosts you have additional control and visibility on how instances are placed on the server.
  • With Dedicated Host the physical server is basically yours. It does not change, it's always the same physical machine for as long as you are paying.

Dedicated Instances

  • Instances running on hardware dedicated to you.
  • Dedicated instances may share hardware with other instances from the same AWS account that are not dedicated instances. Dedicated instances cannot be used for existing server-bound software licenses.
  • Billing per instance.
  • Automatic instance placement.
  • Your instance runs on some dedicated hardware. Its not lockdown to you. If you stop/start instance, you can get some other hardware somewhere else. Basically, the hardware is "yours" (you are not sharing it with others) for the time your instance is running. You stop/start it, you may get different physical machine later on (maybe older, maybe newer, maybe its specs will be a bit different), and so on. So your instance is moved around on different physical servers - whichever is not occupied by others at the time.
  • If you see keyword single tenancy in questions then go for dedicated instances. Dedicated hosts also offers single tenancy but it is more expensive. So unless there is a demand for licensing go for dedicated instances.
    • In short dedicated instances are the most cost effective way of achieving single tenancy.

Tenancy Options

attachments/Pasted image 20220501114513.jpg

  • By default, EC2 instances run on a shared-tenancy basis.
  • Dedicated Instances are Amazon EC2 instances that run in a virtual private cloud (VPC) on hardware that's dedicated to a single customer. Dedicated Instances that belong to different AWS accounts are physically isolated at the hardware level. However, Dedicated Instances may share hardware with other instances from the same AWS account that is not Dedicated Instances.
  • A Dedicated Host is also a physical server that's dedicated to your use. With a Dedicated Host, you have visibility and control over how instances are placed on the server.
  • Descriptions are similar to the purchasing options.
You can only change the tenancy of an instance from dedicated to host, or from host to dedicated after you've launched it.

Last updated: 2022-05-05