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AWS's breadth of services and pricing options offer the flexibility to effectively manage your costs and still keep the performance and capacity your business requires. With AWS, you can easily use the spot market, save when you reserve, and only pay for what you use.

The shift from buying hardware to accessing cloud services makes technology faster, easier and less expensive. It also allows you to buy using operating expenses (OpEx) instead of capital expenses (CapEx). But what if you have money that needs to be spent at the end of your budget year? Take a look at your options below.


On-Demand Instances let you pay for compute capacity by the hour with no long-term commitments or upfront payments. You can increase or decrease your compute capacity depending on the demands of your application and only pay the specified hourly rate for the instances you use.

On-Demand Instances are recommended for:

  • Users that want the low cost and flexibility of Amazon EC2 without any up-front payment or long-term commitment
  • Applications with short term, spiky, or unpredictable workloads that cannot be interrupted
  • Applications being developed or tested on Amazon EC2 for the first time
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Reserved Instances (RIs) provide you with the ability to invest in a larger upfront payment to receive a greater discount. By using Reserved Instances, you can reduce risks, more predictably manage budgets, and comply with policies that require longer-term commitments.

Additionally, you are assured that your Reserved Instance will always be available for the operating system (e.g., Linux/UNIX or Windows) and Availability Zone in which you purchased it.

Reserved Instances are recommended for:

  • Applications with steady state or predictable usage
  • Applications that require reserved capacity
  • Users able to make upfront payments to reduce their total computing costs even further
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Dedicated Instances are Amazon EC2 instances that run in a VPC on hardware that's dedicated to a single customer. Your Dedicated Instances are physically isolated at the host hardware level from instances that belong to other AWS accounts. Dedicated Instances may share hardware with other instances from the same AWS account that are not Dedicated Instances. Pay for Dedicated Instances on-demand, save up to 70% by purchasing Reserved Instances, or save up to 90% by purchasing Spot Instances.

You can also use Dedicated Hosts to launch Amazon EC2 instances on physical servers that are dedicated for your use. Dedicated Hosts give you additional visibility and control over how instances are placed on a physical server, and you can reliably use the same physical server over time. As a result, Dedicated Hosts enable you to use your existing server-bound software licenses like Windows Server and address corporate compliance and regulatory requirements. Compare Dedicated Instances and Dedicated Hosts.

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Spot Instances provide you with the ability to purchase compute capacity with no upfront commitment and at hourly rates, as well as specify the maximum hourly price you are willing to pay to run a particular instance type – like Amazon EC2.

Spot prices fluctuate based on supply and demand for instances, but you will never pay more than the maximum price they have specified. If the Spot price moves higher than your maximum price, the instance will be shut down.

Spot Instances are recommended for:

  • Applications that have flexible start and end times
  • Applications that are only feasible at very low compute prices
  • Users with urgent computing needs for large amounts of additional capacity
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