EC2 Purchasing Options
Inkwell's first AWS bill arrives, and the two web servers that run all year cost the full hourly price every hour. A neighbouring startup running the same servers pays far less. They are not getting a secret deal; they are simply buying the same machines a different way.
The rule
Commit for steady, pay as you go for spiky, use spare for patient.
EC2 offers several ways to pay for the same instances:
- On-Demand: no commitment, billed per second for Linux (one-minute minimum). Full price, full flexibility. Right for short, unpredictable or brand-new workloads.
- Savings Plans: you commit to spend a fixed amount per hour for one or three years, and matching usage is billed at a lower rate. Compute Savings Plans apply across instance families, sizes and Regions, so they stay useful as your servers change.
- Reserved Instances: an older commitment model, also one or three years, tied more closely to particular instance attributes. The savings are similar to Savings Plans.
- Spot Instances: AWS's spare capacity at discounts that can reach 90%. The catch: AWS can take the capacity back with a two-minute warning. Right for work that can stop and resume.
- Dedicated Hosts and Dedicated Instances: hardware not shared with other customers, for licensing or compliance needs. They cost more.
- Capacity Reservations: guarantee capacity in a specific zone, billed whether you use it or not.
The shortcut
Sort each workload by shape: always on → commit (Savings Plans or Reserved); short or unpredictable → On-Demand; can be interrupted → Spot; must be on hardware nobody else uses → Dedicated.
The two web servers
Always on, all year. Commit with a one-year Compute Savings Plan.
Two traps. First, committing before you know your usage: run On-Demand for a few weeks, find the steady baseline, then commit to that baseline only. Second, putting something that cannot be interrupted, such as the only copy of the checkout server, on Spot.
Drills
Answer fast — trust the rule.
Which option can AWS take back with a two-minute warning?
A workload runs 24 hours a day, every day, and will for years. Which option usually costs least without risking interruption?
Inkwell is testing a new feature for two weeks and has no idea how much capacity it needs. Which option fits?
A software licence is tied to physical server cores. Which option addresses that?
Remember
- Commit for steady, pay as you go for spiky, use spare for patient.
- Sort by shape: always on, short and unpredictable, interruptible, or must be dedicated.
- Traps: do not commit before measuring, and never put irreplaceable work on Spot.