Wednesday, April 23, 2025

Several instance Purchase Options to fit different workload needs and budget constraints in aws

AWS offers several instance purchase options to fit different workload needs and budget constraints. Here's a breakdown of the main purchase options, along with why each is used and which is most commonly used:

1. On-Demand Instances

Description:
Pay for compute capacity by the hour or second (depending on the instance type) with no long-term commitment. 

Pay for what you use

Use Case:

  • Short-term or unpredictable workloads.
  • Dev/test environments.
  • Applications that can't be interrupted.

Why Used:

  • Maximum flexibility.
  • No upfront payment.
  • Easy to scale up/down.

Downside:

  • Most expensive per hour.

On-Demand Instances is twtech Most commonly used option for new, testing, or dynamic workloads .

2. Reserved Instances (RIs)

Description:
Commit to using a specific instance type in a specific region for 1 or 3 years in exchange for a significant discount (up to 72%) compared to On-Demand pricing.

Types:

  • Standard RIs – Deepest discounts, no flexibility.
  • Convertible RIs – Slightly lower discount, but allows instance family changes.
  • Scheduled RIs – Specific time windows.

Use Case:

  • Predictable workloads (e.g., steady-state applications).
  • Long-running services like databases or app servers.

Why Used:

  • Cost savings over the long term.
  • Suitable for consistent workloads.

3. Savings Plans

Description:
Commit to a consistent amount of compute usage (measured in $/hr) over 1 or 3 years in exchange for a lower rate, like RIs, but with more flexibility.

Types:

  • Compute Savings Plan – Most flexible (across instance families, regions, OS).
  • EC2 Instance Savings Plan – Tied to instance family in one region.

Use Case:

  • Customers needing RI-style discounts without rigid instance commitments.

Why Used:

  • Combines flexibility and savings.
  • Easier to manage than many RIs.

4. Spot Instances

Description:
Bid on unused EC2 capacity at discounted rates (up to 90% off), but AWS can reclaim these instances with short notice (2 minutes). 
NB: EC2 Spot Instances is Not suitable for critical jobs or databases.

Use Case:

  • Fault-tolerant, stateless, and flexible workloads.
  • Big data processing, CI/CD, batch jobs.

Why Used:

  • Very cost-effective for ephemeral, parallel, or retry-tolerant tasks.

Downside:

  • Instances can be interrupted at any time.

5. Dedicated Hosts

Description:
Physical EC2 servers dedicated for your use.

Use Case:

  • Software that requires a physical server (e.g., BYOL - Bring Your Own License).
  • Compliance or regulatory requirements.

Why Used:

  • Full control over host.
  • Address licensing or isolation needs.

6. Dedicated Instances

Description:
Run in a VPC on hardware dedicated to a single customer, but AWS manages the host.

Use Case:

  • Isolation without needing full control of the hardware.

7. Capacity Reservations

Description:
Reserve capacity in a specific Availability Zone for future use.

twtech is charged at,  On-Demand rate whether twtech is running the instances or not.

twtech creates/cancel Capacity instances anytime.  There is no billing discount

Amazing for  short-term, uninterrupted workloads that needs to be in a specific AZ

Use Case:

  • Mission-critical workloads that must launch without capacity risk.

twtech Most Common Options:

On-Demand Instances are the most frequently used overall, especially during initial development and testing phases due to their flexibility and ease of use.

However, in cost-optimized production environments, Savings Plans and Reserved Instances dominate, especially for consistent workloads. twtech can buy and sell its Reserved Instance in the Marketplace.

If twtech is running steady workloads, it ‘ll likely save most by using Savings Plans (Compute type for flexibility). 

If twtech is doing high-throughput, batch-style jobs, Spot Instances will be incredibly efficient.

NB: EC2 Spot Instances is Not suitable for critical jobs or databases.

The looming question is, which instance purchasing option is most suitable for twtech  & other  aws-users?

NB:

twtech-usecases:  Replace Hotel for with EC2-Instance.

 On demand:  twtech comes and  lodge in the Hotel whenever twtech likes. twtech pays the full price.

Reserved: twtech plans ahead and if twtech plans to stay for a long time, twtech may get a good discount.

Savings Plans: twtech pays a certain amount per hour for certain period and stay in any room type.

Spot instances: the hotel allows twtech to bid for the empty rooms and the highest bidder keeps the rooms. twtech can get kicked out of the room at any time if another client bits higher.

Dedicated Hosts: twtech books an entire building of the Hotel.

Capacity Reservations:  twtech books a room for a period with full price even you don’t stay in it the room.

charges for IPv4 addresses

• Since February 1st 2024, there is a charge for all Public IPv4 created in the account.

• $0.005 per hour of Public IPv4 (~ $3.6 per month)

• For new accounts in AWS, users have a free tier for the EC2 service: 750 hours of Public IPv4 per month for the first 12 months.

• For all other services, there is no free tier. twtech pays for the services.

NB:

Never let things running unnecessarily. twtech Saves cost by shutting services no longer needed.

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