Buying options:

On-Demand:

• On-Demand purchasing allows you to choose any instance type you like and provision/terminate it at any time (on-demand).
  • Is the most expensive purchasing option.
  • Is the most flexible purchasing option.
  • You are only charged when the instance is running:
    • Per second pricing: Amazon Linux and Ubuntu AMIs (60 seconds billing minimum).
    • Hourly pricing: Windows, RHEL, and any other AMIs where per second pricing is not indicated.
  • You can provision/terminate an on-demand instance at any time.

Reserved:

• Reserved purchasing allows you to purchase an instance for a set time period of one (1) or three (3) years.
  • This allows for a significant price discount over using on-demand.
  • You can select to pay upfront, partial upfront, no upfront.
  • Once you buy a reserved instance, you own it for the selected time period and are responsible for the entire price - regardless of how often you use it.

Spot:

• Spot pricing is a way for you to "bid" on an instance type, and only pay for and use that instance when the spot price is equal to or below your "bid" price.

  • This option allows Amazon to sell the use of unused instances, for short amount of time, at a substantial discount.

  • Spot prices fluctuate based on supply and demand in the spot marketplace.

  • You are charged by the minute or hour (same AMI conditions as on-demand instances).

  • When you have an active bid, an instance is provisioned for you when the spot price is equal to or less than your bid price.

  • A provisioned instance automatically terminate when the spot price is greater than your bid price.

  • Bid on unused EC2 instances for "non production applications".