Tutorial / Cram Notes
EC2 instances can be purchased using one of the four options: On-Demand, Reserved Instances, Spot Instances, and Savings Plans.
On-Demand Instances
- Cost: Highest cost per hour; no upfront payment or long-term commitment.
- Performance: Immediate access to computing resources with consistent performance.
- Use case: Ideal for short-term, irregular workloads that cannot be interrupted.
Reserved Instances (RI)
- Cost: Lower cost compared to On-Demand; requires upfront payment, with discounts for term and payment option.
- Performance: Same as On-Demand Instances.
- Use case: Best for steady-state workloads with predictable usage patterns. Commitment of 1 or 3 years.
Spot Instances
- Cost: Lowest cost per hour, up to 90% discount compared to On-Demand; prices vary based on supply and demand.
- Performance: Comparable to On-Demand but can be terminated by AWS with a two-minute notice if demand increases.
- Use case: Suitable for flexible, fault-tolerant, and temporary workloads.
Savings Plans
- Cost: Commit to a consistent amount of usage (e.g., $10/hour) for 1 or 3 years for a discount over On-Demand rates.
- Performance: No difference from On-Demand Instances.
- Use case: Long-term commitment similar to RI but with more flexibility across instance families and regions.
Amazon RDS Purchasing Options
The purchasing options for RDS are similar to EC2. They include On-Demand Instances and Reserved Instances.
RDS On-Demand Instances
- Cost: Pay by the hour, no long-term commitment.
- Performance: Reliable, consistent database performance.
- Use case: Ideal for unpredictable workloads with no requirement for long-term commitment.
RDS Reserved Instances
- Cost: Substantial discounts over On-Demand, with a choice of All Upfront, Partial Upfront, or No Upfront payments.
- Performance: Same as On-Demand Instances.
- Use case: Steady-state or predictable usage with a significant cost-saving potential for a 1-year or 3-year term.
Amazon S3 Purchasing Options
With Amazon S3, pricing is based on storage, requests, and data transfer, but there are different storage classes tailored to different use cases.
S3 Standard Storage
- Cost: Higher per GB cost; no retrieval fees.
- Performance: High durability and availability with low latency and high throughput.
- Use case: Ideal for frequently accessed data.
S3 Intelligent-Tiering
- Cost: Small monthly monitoring and automation fee; tiered pricing for access.
- Performance: Automatic cost savings by moving data to lower-cost tiers when it’s not accessed for 30 consecutive days.
- Use case: Suitable for data with unpredictable access patterns.
S3 Glacier and S3 Glacier Deep Archive
- Cost: Lowest storage cost; retrieval times ranging from minutes to hours and retrieval fees apply.
- Performance: Designed for long-term archival, lower retrieval speed.
- Use case: For data that is rarely accessed and can tolerate retrieval delays, like compliance archives.
In leveraging these purchasing options, understanding the particular patterns of usage is key to optimizing both cost and performance. For example, an organization might use a mix of On-Demand Instances for development environments that only run during business hours, Reserved Instances for their production databases with consistent loads, and Spot Instances for batch processing jobs that are flexible in their timing.
To illustrate, consider two AWS customers, Customer A and Customer B, with different use cases:
| Customer | Instance Type | Workload Type | Purchasing Option | Cost (Assuming) | Performance |
|---|---|---|---|---|---|
| Customer A | m5.large | Production | Reserved Instance | $$$ | High |
| Customer A | t3.medium | Development/Test | On-Demand | $$ | Moderate |
| Customer B | c5.9xlarge | Batch Processing | Spot Instance | $ | High (Variable) |
Note: The dollars symbols ($$$, $$, $) represent relative costs, where more dollar symbols indicate a higher cost.
When you select the right purchasing options, you are effectively balancing cost against performance, availability, and flexibility. Key strategies include:
- Performing a detailed analysis of historical usage and future needs before committing to long-term purchasing options.
- Using AWS Cost Explorer and AWS Budgets to track and optimize expenses.
- Taking advantage of AWS tools like Auto Scaling and AWS Trusted Advisor, which can help inform purchasing decisions.
In conclusion, the AWS Certified Solutions Architect – Professional exam will evaluate your understanding of these purchasing options and your ability to apply them in real-world scenarios to build cost-effective and high-performing solutions on AWS.
Practice Test with Explanation
True or False: Reserved Instances require upfront payment to provide a discount on the hourly charge for the instance.
- False
Reserved Instances offer the choice between three payment options – All Upfront, Partial Upfront, or No Upfront. Only All Upfront requires an upfront payment, while the others provide a discount without the need for paying the entire cost upfront.
True or False: Using Spot Instances is recommended for fault-tolerant and flexible applications.
- True
Spot Instances are recommended for workloads that are tolerant of interruptions because they can be terminated when the spot price exceeds the bid price. They are suitable for flexible applications like batch processing and background jobs.
Which AWS purchasing option provides the most significant savings but also requires a long-term commitment?
- A) On-Demand Instances
- B) Reserved Instances
- C) Spot Instances
- D) Savings Plans
B) Reserved Instances
Reserved Instances often provide the most significant savings compared to On-Demand Instances, but they require a commitment for 1 or 3 years.
Which AWS purchasing option allows you to use unused EC2 computer capacity at a discounted rate compared to the On-Demand price?
- A) Dedicated Hosts
- B) Spot Instances
- C) Reserved Instances
- D) Savings Plans
B) Spot Instances
Spot Instances allow customers to purchase unused EC2 capacity at a lower price than On-Demand Instances, but the instances can be terminated by AWS with little notice.
True or False: AWS Savings Plans offer rate discounts in exchange for committing to a consistent usage amount (measured in $/hour) for a 1 or 3-year period.
- True
AWS Savings Plans offer lower rates similar to Reserved Instances but instead of reserving specific instances, you commit to a consistent amount of usage (e.g., $10/hr) for the chosen term.
True or False: Dedicated Hosts are often the most cost-effective solution for running non-constant workloads.
- False
Dedicated Hosts are not typically the most cost-effective for non-constant workloads. They are more suitable for licensing requirements or for when you need to place your virtual machines on a specific, single-tenant hardware.
Which purchasing option allows you to allocate a fixed hourly fee to cover any instance type used, as long as you maintain the commitment level?
- A) On-Demand Instances
- B) Spot Instances
- C) Reserved Instances
- D) Savings Plans
D) Savings Plans
Savings Plans provide a flexible pricing model where you commit to a consistent usage amount for a 1 or 3-year period and can cover any instance type or family, which provides cost savings and flexibility.
What is an advantage of using On-Demand Instances?
- A) Lowest long-term cost
- B) No upfront payment required
- C) Discounted rates for sustained use
- D) Protection from price fluctuations
B) No upfront payment required
On-Demand Instances provide flexibility and do not require any upfront payment or long-term commitment, making them suitable for workloads with unpredictable usage patterns.
True or False: AWS enables cost management by providing various purchasing options that users can choose based on their application and budget needs.
- True
AWS offers a range of purchasing options such as On-Demand, Reserved Instances, Spot Instances, and Savings Plans, allowing users to optimize their costs based on their specific needs.
Which of the following statements is true regarding AWS Reserved Instances?
- A) Reserved Instances can be canceled at any time.
- B) Reserved Instances offer the same price regardless of the commitment term.
- C) Reserved Instances provide capacity reservation for specific instance types.
- D) Reserved Instances cannot be transferred between regions.
C) Reserved Instances provide capacity reservation for specific instance types.
When you purchase a Reserved Instance, you reserve capacity for a specific instance type in a region or availability zone, which comes with a discounted hourly rate.
True or False: Amazon EC2 Spot Instances continue to run until you decide to terminate them.
- False
Spot Instances can be terminated by AWS with two minutes of notification when the spot price exceeds the bid price. They do not run until manually terminated like On-Demand Instances.
When is it most cost-effective to use On-Demand Instances?
- A) For applications with steady state usage
- B) For short-term, irregular workloads that cannot be interrupted
- C) For long-term workloads with consistent usage
- D) For non-production environments with infrequent access
B) For short-term, irregular workloads that cannot be interrupted
On-Demand Instances are ideal for short-term, sporadic workloads where you pay for compute capacity by the hour without any long-term commitment, which is perfect for jobs that cannot be interrupted and do not fit a predictable pattern.
Interview Questions
What are the main types of purchasing options available for Amazon EC2 instances, and how do they differ in terms of cost and performance?
The main purchasing options for Amazon EC2 instances are On-Demand Instances, Reserved Instances (Standard and Convertible), Savings Plans, and Spot Instances. On-Demand Instances offer the most flexibility without upfront payment but are the most expensive option per hour. Reserved Instances require an upfront payment for a 1- or 3-year term, giving a significant discount over On-Demand pricing, and ensure capacity. Convertible Reserved Instances allow you to change the instance type during the term. Savings Plans offer similar cost savings to Reserved Instances but with more flexibility in terms of instance family, size, OS, tenancy, and AWS Region. Spot Instances offer the maximum discount (up to 90% off On-Demand rates) but can be interrupted by AWS with a two-minute notification when AWS needs the capacity back.
How can Reserved Instances help reduce AWS costs, and what are the performance implications?
Reserved Instances help reduce AWS costs by providing a discount (up to 75% compared to On-Demand pricing) in exchange for committing to a certain usage level (either a 1-year or 3-year term) with an upfront payment. There’s no performance difference between a Reserved Instance and an On-Demand Instance; the cost savings are purely due to the time commitment and not due to any performance changes.
Can you explain how AWS Savings Plans work, and how do they compare to Reserved Instances in terms of cost and flexibility?
AWS Savings Plans offer cost savings similar to Reserved Instances but with greater flexibility. Under a Savings Plan, you commit to a certain amount of usage (measured in $/hour) for a 1 or 3-year term and receive a lower price for this usage. There are two types of Savings Plans: Compute Savings Plans, which provide the most flexibility and can be applied to any EC2 instance regardless of region, instance family, OS, or tenancy, and EC2 Instance Savings Plans, which apply to a specific instance family within a region. They compare to Reserved Instances in that they both offer savings, but Savings Plans offer more flexibility whereas Reserved Instances offer potentially higher savings but are more restrictive.
How do Spot Instances work, and what are the implications for cost and performance in AWS?
Spot Instances allow you to take advantage of unused EC2 capacity at a significant discount compared to On-Demand pricing (up to 90% off). However, these instances can be reclaimed by AWS with just a two-minute notice when the capacity is needed elsewhere. In terms of performance, Spot Instances provide the same capabilities as On-Demand Instances. The main implication is the potential for interruptions, which can affect the performance of applications if they are not designed to handle such disruptions.
When should you consider using On-Demand Instances over other purchasing options?
On-Demand Instances should be used when you require maximum flexibility without any long-term commitment or when you have unpredictable and intermittent workloads that cannot be interrupted. They are particularly suitable for development, testing, and staging environments where the usage pattern is uncertain or for short-term and spiky workloads that are not cost-effective under other purchasing options.
In what scenarios would using Reserved Instances be less cost-effective than On-Demand Instances?
Using Reserved Instances would be less cost-effective than On-Demand Instances when your workload is highly unpredictable and you are unable to accurately forecast your usage for the Reserved Instance term (1 or 3 years). In such cases, if you over-provision, you may end up paying for capacity that you don’t use. If your workload decreases significantly or becomes sporadic, it may be more cost-effective to use On-Demand Instances despite the higher hourly rate.
Can you explain what happens if AWS reclaims a Spot Instance and how you can mitigate the impact on your application’s performance?
If AWS needs to reclaim a Spot Instance, it will provide a two-minute warning before the instance is interrupted. To mitigate the impact on your application’s performance, you can design your application for fault tolerance by using Spot Instance interruption notices to gracefully save the state and shutdown or to move critical workloads to other instances, possibly On-Demand or Reserved Instances. You can also use Spot Fleet or EC2 Auto Scaling groups to automatically replace terminated Spot Instances with new ones or different types to maintain application performance.
How can using a combination of purchasing options (On-Demand, Reserved, Spot Instances) help optimize cost while maintaining the required performance?
Using a diversified purchasing strategy allows you to match the cost and usage profile of each part of your application with the most appropriate purchasing option. For your steady-state and predictable baseline workloads, you can use Reserved Instances or Savings Plans to reduce costs. For flexible, scalable parts of your workload where interruptions are tolerable, Spot Instances can be employed to further reduce expenses. Finally, you can use On-Demand Instances to handle peak loads or unpredictable bursts in traffic, ensuring that performance remains stable without overcommitting on long-term purchases.
What is the role of AWS Cost Explorer in managing and optimizing your purchasing options for cost and performance?
AWS Cost Explorer is a tool that enables you to visualize and manage your AWS spending. It provides detailed data that can help you understand your spending patterns and identify opportunities for cost optimization across different AWS services and purchasing options. With AWS Cost Explorer’s data and insights, you can make informed decisions about when to reserve capacity or scale with On-Demand or Spot Instances, ensuring that you are optimizing both cost and performance.
How does the choice of region affect the cost of AWS services, and how should this be weighed against performance considerations when selecting purchasing options?
AWS pricing can vary by region due to differences in operational costs, demand, and other factors. Generally, some regions (often those in the United States) may have lower pricing for services. When selecting purchasing options, you should consider the region not only for cost but also for performance. For instance, choosing a region that is geographically closer to your customers can reduce latency and improve application performance. Balancing the need for cost savings with the need for performance is critical; sometimes paying slightly more for a nearby region is justified by the performance gains.
Explain how the AWS Free Tier can influence your purchasing decisions for new applications or services.
The AWS Free Tier provides a limited amount of certain services for free, which can significantly influence purchasing decisions for new applications or experimental services. By leveraging the Free Tier, developers can reduce initial costs while building and testing applications. It allows them to understand the usage patterns and performance needs before committing to paid purchasing options. Once an application outgrows the Free Tier limits, informed decisions can be made about whether to transition to On-Demand, Reserved Instances, or other purchasing options based on the anticipated workload and budget.
Does AWS offer any tools or services that automatically shift workloads between purchasing options to optimize costs? If so, please explain how this works.
Yes, AWS offers tools such as AWS Cost Explorer, AWS Budgets, AWS Instance Scheduler, and AWS Autoscaling that can assist in shifting workloads between purchasing options. These tools can identify underutilized resources, suggest changes to purchasing plans, and automatically adjust resources based on demand. For example, AWS Auto Scaling can adjust the number of EC2 instances in response to demand, using a mix of Spot and On-Demand Instances to optimize costs. Additionally, tools like AWS Elastic Beanstalk and AWS Lambda can automatically manage the scaling and provisioning of resources, allowing you to pay only for what you use and optimize costs in the process.
This blog post really clarified how different purchasing options in AWS can impact overall cost and performance.
Agreed, it’s essential to understand the trade-offs between Reserved Instances and On-Demand Instances.
Thanks for the informative post!
The explanation on Savings Plans vs. Reserved Instances was very helpful.
Good post! Very detailed and useful.
I think the blog could have included more examples of cost calculations.
Could someone explain the impact of Spot Instances on performance metrics?
Really appreciated the deep dive into AWS purchasing options.