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Here we will define that What is AWS EC2 and its pricing models?
EC2 is short for Elastic Compute. EC2 is like virtual computer equipment.
what is AWS EC2 Service?
In terms of Amazon Web Service, EC2 provides scalable compute services.
Generally, AWS is used by Enterprise companies that use the servers and compute power to fulfil their compute needs. Therefore, in AWS, the EC2 server is referred to by another cloud terminology “EC2 Instance”.
Amazon Web Service (AWS) has many benefits such as it is fast, low in cost, provides global computation and storage capabilities. In terms of pricing, AWS offers on-demand, pay-as-you-go, reservation-based payment models. These different pricing models can be applied according to the scenario in which you are working. You can build an innovative and cost-effective solution for your AWS based application using the latest technologies.
According to the AWS pricing whitepaper: “While the number and type of services offered by AWS have increased. The pricing criteria have not changed. You can use Pay-As-You-Go, Pay-less when you reserved, pay even less per unit by using more, and Pay even less as AWS grows”.
When you choose to run a virtual server in a cloud using Amazon EC2, you have an opportunity to choose the right pricing model according to your needs. EC2 has several different pricing models.
The on-demand pricing model is EC2’s first pricing methodology. Using no long-term commitments, you can pay a flat amount by the hour or even by the second with this arrangement. This means you can spin it up, leave it running for a few hours, and then terminate it when you are ready. This price model is ideal for developers since they may establish an instance, complete the work, and then terminate the instance.
When these types of pricing models were not available, provisioning required the use of a physical server. To carry out the implementation, you would have to pay the money. It means that all of these little businesses with shoestring resources would have been unable to bring their products to market.
AWS has changed the implementation procedure and pricing criteria by introducing the on-demand pricing model for the virtual machine.
This pricing model provides you with capacity reservations and it offers a significant discount on the hourly charge for an instance. The contract term required for this pricing model is one year or three years. The more you pay up-front, the more you are going to save. This type of pricing model is typically used when you create such an application that has steady-state and predictable usage.
The third pricing model is designed for spot instances. This is where Amazon has excess capacity. It provides high capacity service at a low price.
This model makes the service available for a few hours or a few days but not available for a long time. It provides a 90% discount as compared to on-demand instances.
This is mostly used when not everyone is using EC2 at once. What they do is that they drop the prices of their EC2 instance to try and get people to use that capacity. However, when other people are provisioning on-demand or other EC2 instances, and they run out of capacity, they will want that capacity back. So, the price moves around with spot instances.
It is exactly like the stock market, it goes up and down. The main advantage of this instance is that you set the price that you want to bid at. If it hits that price, you have your instance, if it goes above that price, then you may lose a couple of instances within a couple of minutes.
A dedicated host is a physical EC2 server that is dedicated to you. This helps to reduce costs by allowing you to use your existing server-bound software licenses. This type of instance is mainly used when you have got some really strict licensing conditions like with Oracle for example.
Before AWS, if you placed an order for a web server or data server (which are physical servers), they would take anywhere around 10 to 12 days to do a deployment and it may even sometimes take up to 20 days. Then came Amazon EC2, which gave people the power to provision virtual machines in the cloud at the touch of a button.
These virtual machines can be made available in a matter of minutes, having a massive impact on the entire planet. Learn more about EC2 and all the necessary information you need to appear in the Certified Solutions Architect Associate exam. Order the Third Edition of AWS Certified Solutions Architect – Associate today to get 21% OFF!
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