EC2 Pricing Options - On Demand, Reserved, Spot, Dedicated

Amazon EC2 can be used with various pricing options such as on-demand, reserved, spot and dedicated server. 


On Demand

  1. Pay fixed rate per hour without any commitment.

  2. Suitable for applications that are:

    1. Short term and cannot be interrupted.

    2. Developed and tested on EC2 for first time.



  1. Reserve for a longer period and get additional discounts.

  2. Suitable for applications:

    1. With predictable usage

    2. Need reserved capacity

    3. With users able to pay upfront

  3. Can be sold on Reserved Instance Marketplace (if not using). Check for T&C.



  1. Bid with a price for the storage capacity needed, and instances will be provisioned when it matches the spot price.

  2. Greater savings for applications.

  3. Spot prices may vary based on regions and availability zones.

  4. Amazon may terminate the spot instance if spot price goes up, but will not charge for the partial hour.

  5. If user terminates a spot instance, he will be charged for the complete hour.

  6. Suitable for applications:

    1. with flexible start and end timings.

    2. Only feasible at very low compute rates

    3. Need for large amount of computing capacity.

    4. Stateless applications that will not be affected much with a restart in between.


Dedicated Hosts

  1. Physical EC2 instances

  2. Can pay per hour

  3. Suitable for applications:

    1. With licenses that demand to be on physical machines and not on virtual machines.

    2. With regulatory requirements that does not support multi-tenant virtualization (e.g. governments)


Additional Notes

  1. We can transfer a reserved instance from one Availability Zone to another. However, we cannot transfer a reserved instance from one region to another.

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