Instiq
Chapter 4 · Designing Cost-Optimized Architectures·v2.1.0·Updated 6/14/2026·~9 min

What's changed: In-scope coverage: added compute placement (Elastic Beanstalk/Outposts/VMware Cloud on AWS/Wavelength/Serverless Application Repository/ECS Anywhere/EKS Anywhere/EKS Distro), cost visibility (Cost and Usage Report/Compute Optimizer/License Manager), and management/governance (CloudFormation/Service Catalog/Control Tower/Systems Manager/CloudWatch/X-Ray/Managed Grafana/Managed Service for Prometheus/Health Dashboard/Well-Architected Tool/Management Console) across sections

4.1Compute Pricing Models

Key points

Understand EC2 pricing models—On-Demand, Savings Plans/Reserved Instances, and Spot—and how to optimize cost by matching them to workloads.

The first step in cost optimization is choosing the pricing model that fits the workload. EC2 offers several purchasing options.

4.1.1EC2 pricing models

Diagram of EC2 pricing models: On-Demand (pay per use, no commit, flexible/short-term), Savings Plans/RI (1–3 yr commit for big discount, steady workloads), and Spot (spare capacity, cheapest, interruptible/fault-tolerant).
EC2 pricing models
  • On-Demand: pay per use, no commitment; for short-term/unpredictable workloads and dev/test. Most flexible, higher unit price.
  • Savings Plans / Reserved Instances (RI): big discount (up to ~70%) for a 1–3 year commitment; for steady baseline usage.
  • Spot Instances: cheapest (up to ~90% off, spare capacity) but interruptible; for fault-tolerant, stateless batch/big-data.
  • Dedicated hosts/instances: physically isolated (for licensing/compliance, pricier).

Cost optimization starts with matching the pricing model to the workload’s nature. The deciding axis: "can you commit? / can you tolerate interruption?" Cover the always-on baseline with Savings Plans/RI (long-term commit for discounts), handle spikes/unpredictability with On-Demand, and run interruptible, stateless batch on Spot for the lowest cost—combine them. For example: baseline web tier on Savings Plans, burst above peak on On-Demand, nightly large batch on Spot.

Continue reading — free sign-up

You're reading the free preview. Sign up free to read this section in full, plus every chapter (including 4+) and all questions.