EC2 pricing models (on-demand, reserved, spot) in AWS - Step-by-Step Execution

Process Flow - EC2 pricing models (on-demand, reserved, spot)

Start

↓

Choose Pricing Model

↓

On-Demand

↓

Pay per

↓

hour

↓

Flexible

↓

No long

↓

term

↓

Use EC2 Instance

↓

End

This flow shows how you pick an EC2 pricing model and what happens next: On-Demand means pay as you go, Reserved means commit and save, Spot means bid for cheap but risk interruption.

Execution Sample

AWS

Choose pricing model:
if On-Demand:
  pay hourly
elif Reserved:
  commit 1-3 years
  pay less
elif Spot:
  bid for capacity
  risk interruption

This code chooses an EC2 pricing model and applies its payment and usage rules.

Process Table

Step	Pricing Model Chosen	Payment Type	Commitment	Cost Behavior	Risk
1	On-Demand	Pay per hour	No commitment	Flexible, higher cost	No risk of interruption
2	Reserved	Pay upfront or partial	1-3 years	Lower cost, save money	No risk of interruption
3	Spot	Bid for capacity	No commitment	Lowest cost	Can be interrupted anytime
4	End	-	-	-	Pricing model selected and applied

💡 Execution stops after pricing model is chosen and payment rules are set.

Status Tracker

Variable	Start	After Step 1	After Step 2	After Step 3	Final
Pricing Model	None	On-Demand	Reserved	Spot	Selected
Payment Type	None	Pay per hour	Pay upfront or partial	Bid for capacity	Set
Commitment	None	No commitment	1-3 years	No commitment	Set
Cost Behavior	None	Flexible, higher cost	Lower cost	Lowest cost	Set
Risk	None	No risk of interruption	No risk of interruption	Can be interrupted anytime	Set

Key Moments - 3 Insights

Why does Spot pricing have a risk of interruption?

Spot instances use unused capacity that can be taken back by AWS anytime, as shown in step 3 of the execution_table where risk is 'Can be interrupted anytime'.

Does Reserved pricing require payment upfront?

Reserved pricing can require upfront or partial payment for 1-3 years commitment, as shown in step 2 of the execution_table under 'Payment Type' and 'Commitment'.

Can On-Demand pricing be stopped anytime without penalty?

Yes, On-Demand pricing has no long-term commitment and no interruption risk, as shown in step 1 of the execution_table.

Visual Quiz - 3 Questions

Look at the execution_table, which pricing model requires a 1-3 year commitment?

A On-Demand

B Reserved

C Spot

D None

💡 Hint

Check the 'Commitment' column in the execution_table rows.

At which step does the risk of interruption appear?

A Step 1

B Step 2

C Step 3

D Step 4

💡 Hint

Look at the 'Risk' column in the execution_table.

If you want the lowest cost but accept possible interruptions, which pricing model should you choose?

A Spot

B On-Demand

C Reserved

D None

💡 Hint

Refer to 'Cost Behavior' and 'Risk' columns in the execution_table.

Concept Snapshot

EC2 Pricing Models:
- On-Demand: pay hourly, no commitment, flexible, higher cost
- Reserved: commit 1-3 years, pay upfront or partial, lower cost
- Spot: bid for unused capacity, lowest cost, can be interrupted
Choose based on cost vs. flexibility needs.

Full Transcript

This visual execution shows how AWS EC2 pricing models work. You start by choosing a pricing model: On-Demand, Reserved, or Spot. On-Demand means paying hourly with no long-term commitment and no risk of interruption. Reserved requires a 1-3 year commitment with upfront or partial payment, offering lower cost and no interruption risk. Spot lets you bid for unused capacity at the lowest cost but can be interrupted anytime. The execution table tracks each step's payment type, commitment, cost behavior, and risk. Key moments clarify why Spot can be interrupted and Reserved requires commitment. The quiz tests understanding of commitment, interruption risk, and cost trade-offs. This helps beginners see how pricing choices affect cost and usage.