‫Hi, and welcome to this lecture
‫on EC2 Instances Purchasing Options.
‫So we've been using so far, on-demand EC2 instances.
‫They allow us to run instances on demands,
‫that means they're good for short workloads,
‫we get predictable pricing,
‫and we're going to pay by the second.
‫But if you have different kind of workloads,
‫you can optimize your discounts and your pricing
‫by specifying it to AWS.
‫For example, you can use reserved instances
‫and you have one year or three years term,
‫and they're meant for long workloads.
‫So if you know you're going to run a database
‫for a long time, then a reserved instance is great.
‫And if you want to have a flexible instance type,
‫so for example, you want to change
‫the instance type over time,
‫then convertible reserved instances are for you.
‫And by the way, don't worry,
‫I'm going to do a deep dive in all of those over time.
‫Okay, next we have savings plan
‫and savings plan are one and three years term,
‫and they're more modern
‫because instead of committing to a specific instance type,
‫you commit to a specific amount of usage in dollars,
‫and there again, for long workloads.
‫Spot instances instead are meant
‫for very short workloads,
‫they're very, very cheap,
‫but at any time you can lose these instances
‫and that makes them less reliable.
‫Dedicated host allows you to book an entire physical server
‫and control instance placements.
‫And dedicated instances means that
‫no other customers will share your hardware.
‫Finally, capacity reservations allow you to reserve capacity
‫in a specific AZ for any duration.
‫Now let's look at EC2 on-demand.
‫So you're going to pay for what you use.
‫So that means that if you're using Linux or Windows,
‫you're going to be getting a billing per second
‫after the first minute,
‫or for all the other operating systems,
‫you're going to get a billing per hour.
‫It has the highest cost but no upfront payments
‫and no long-term commitments.
‫That means it's definitely recommended for a short-term
‫and uninterrupted workload
‫where you cannot predict how the application will behave.
‫Now for reserved instances,
‫and by the way, the numbers I show you can change over time,
‫so I will not update this video every time,
‫but it gives you an idea of what the numbers can be.
‫So the reserved instances give you a 72% discounts
‫compared to on-demand.
‫And you reserve a specific instance attributes.
‫For example, the instance type, the region,
‫the tenancy, and the OS.
‫You specify a reservation period one year or three years,
‫to get even more discounts,
‫and whether or not you wanna pay upfront,
‫partially upfront, or not upfront.
‫And all upfront of course gives you
‫the maximum amount of discounts.
‫In terms of the scope,
‫do you want the scope to be
‫into a specific region or a zone?
‫That means reserve capacity in a specific AZ.
‫And so you would use reserved instances
‫for the steady-state usage applications,
‫think for example, for a database.
‫And you can buy or sell your reserved instances
‫in a marketplace if you don't need them anymore.
‫And there is a specific kind of reserved instances
‫called the convertible reserved instance,
‫which is allowing you to change the instance type,
‫the instance family, the operating system,
‫the scope and the tenancy.
‫And because you have more flexibility,
‫well you get a bit less discounts
‫you get up to 66% discounts.
‫So that's for reserved instances.
‫And now you have the EC2 savings plans
‫which is to allow you to get a discount
‫based on long-term usage,
‫which is the same 70% as reserved instances.
‫But instead, you're going to say,
‫"I want to spend $10 per hour for the next 1, 2, 3 years."
‫And any usage beyond the savings plan
‫is going to be billed at the on-demand price.
‫So with savings plans,
‫you're locked to a specific instance family and region.
‫For example, you say,
‫"I want to have M5 type of instance family in us-east-1."
‫But you're flexible across the instance size.
‫So you can have m5.xlarge, m5.2xlarge and so on.
‫The OS, so you can switch
‫between Linux and Windows and so on.
‫And the tenancy, you can switch
‫between host, dedicated and default.
‫Now, for spot instances,
‫they have the most aggressive discounts,
‫so up to 90% discounts compared to on-demand,
‫but they are instances you can lose at any point of time
‫because you define a max price
‫you're willing to pay for your spot instances.
‫And if the spot price goes over it,
‫then you're going to lose it.
‫So they're the most cost-efficient instances in AWS
‫and they're going to be very helpful
‫if you have a workload that is resilient to failure.
‫So what could they be?
‫Well, it could be batch jobs, data analysis,
‫image processing, any kind of distributed workloads,
‫or workloads that have a flexible start and end time.
‫They are not suited for critical jobs or databases
‫and the exam will test you on that.
‫Next we have dedicated hosts.
‫So you get an actual physical server
‫with EC2 instances capacity
‫fully dedicated to your use case.
‫And you want to have dedicated hosts
‫in the use case of, you have compliance requirements
‫or you need to use your existing
‫server-bound software licenses that has billing
‫based on a per-socket, per-core, per VM software licenses.
‫This is in these kind of use cases
‫that you need to access the physical server
‫and get a dedicated host.
‫So for dedicated hosts, you get on-demand,
‫and you're gonna pay per second,
‫or you can reserve them for one or three years.
‫They're the most expensive option of AWS
‫because you actually reserve a physical server.
‫And so again, a use case is when you have
‫a software that comes with a licensing model
‫that is bring your own license.
‫Or if you have a company that has strong regulatory
‫or compliance needs.
‫We also have dedicated instances,
‫and there are instances that runs on hardware
‫that's dedicated to you,
‫which is different from the physical server.
‫But you may share the hardware with other instances
‫in the same accounts
‫and you have no control over instance placements.
‫So there's a difference between dedicated instances
‫and hosts, that is here.
‫At the exam, honestly, it doesn't trick you
‫into one or the other,
‫but remember that dedicated instances
‫mean that you have your own instance on your own hardware,
‫whereas dedicated host,
‫you get access to the physical server itself
‫and it gives you visibility into the lower level hardware.
‫Next, we have capacity reservations for EC2.
‫So you can reserve on-demand instances
‫in a specific AZ for any duration.
‫And then you get access to that capacity
‫whenever you need it.
‫You have no time commitment so you can reserve capacity
‫or cancel your reservation at any time.
‫And no billing discounts.
‫The only purpose is to reserve capacity.
‫So if you want to get billing discounts,
‫you need to combine it with regional reserved instances
‫or your savings plan.
‫And you're charged at the on-demand rates,
‫whether or not you run instances.
‫So that means that your reserved capacity,
‫you're going to be billed for it,
‫and you know for sure that if you want to launch instances
‫they're going to be available,
‫but if you don't launch them,
‫you're still going to get charged.
‫So they're very suitable
‫for short-term uninterrupted workloads
‫that need to be in a specific AZ.
‫So it gets difficult to understand
‫which purchasing option is right for me,
‫especially if you are a beginner.
‫But let me give you a summary.
‫The first one is on-demand.
‫So we'll take a resort as an analogy.
‫And with on-demand,
‫you have a resort and you come in whenever you like
‫and whenever you like, you pay the full price.
‫For reserved, well, you like to plan ahead
‫and you know you're going to stay a very long time
‫in your resort, one, two, three years,
‫and then you're going to get a good discount
‫because we know you're going to stay long time.
‫Savings plan is saying,
‫"Hey, I know for sure that in my resort
‫I'm going to spend a specific amount.
‫So I'm going to spend maybe $300 per month
‫every month for the next 12 months."
‫And therefore, you may wanna change the room type over time.
‫So king, suite, sea view, and so on.
‫But the savings plan is saying,
‫"Hey, you're to commit
‫to a specific spending in your hotel."
‫Spot instances are whenever
‫the hotel runs very last-minute discounts
‫because they have empty rooms and they wanna attract people.
‫So they get empty rooms
‫and people bid on getting this empty room.
‫And so you get very, very discounts.
‫But in this specific resort,
‫well, you can get kicked out of at any time
‫if someone is willing to pay more
‫for your room than what you did.
‫But I don't wanna stay in such a resort.
‫Dedicated host is saying,
‫"Hey, I want to book the entire building of the resort."
‫So you get your own hardware, your own resort.
‫And then capacity reservation is saying,
‫"I'm going to book a room,
‫I'm not even sure if I don't stay in,
‫but I know that if I want to stay in, I will have it."
‫And you will pay full price
‫for booking that room nonetheless.
‫In terms of price comparison,
‫I've just put together this table to give you
‫one example at one point of time.
‫So I took an m4.large in us-east-1,
‫and the on-demand price is 10 cents,
‫but then the spot price is going to be up to,
‫for example, 61% off in my example.
‫Then if you want to reserve your instance,
‫as you can see, you have different pricing.
‫If you wanted to have for one year, for three years,
‫and pay no upfront or all upfront.
‫Same for the EC2 savings plan
‫we see that it is the same as a reserved instance discounts.
‫We also get reserved convertible instances
‫and we have dedicated host,
‫which is at the on-demand price.
‫The dedicated host reservation which is up to 70% off
‫because you reserve your host.
‫And capacity reservation again at the on-demand price.
‫So the exam will ask you to just know
‫which type of instance is the right one
‫based on your workloads.
‫And by now, you should have some good hints,
‫and don't worry, we will practice this over time.
‫All right, that's it for this lecture,
‫I hope you liked it.
‫And I will see you in the next lecture.