Cloud Networking Glossary
Learn the Fundamentals

What is EC2?

Amazon Web Services offers a broad set of global cloud-based products including compute, storage, databases, analytics, networking, mobile, developer tools, management tools, IoT, security, and enterprise applications. It boasts on-demand, availability in seconds, with pay-as-you-go pricing. This allows enterprises, start-ups, small and medium-sized businesses as well as customers in the public sector to access the building blocks they need to respond quickly to changing business requirements.

Amazon EC2 Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides resizable compute capacity in the cloud. It is designed to make web-scale computing easier for developers. The Amazon EC2 simple web service interface allows you to obtain and configure capacity with minimal friction. It provides you with complete control of your computing resources and lets you run on Amazon’s proven computing environment. See Amazon EC2 Instance Purchasing Options for a more detailed description.

• On-Demand Instances—With On-Demand instances, you pay for compute capacity by the hour with no long-term commitments. You can increase or decrease your compute capacity depending on the demands of your application and only pay the specified hourly rate for the instances you use. The use of On-Demand instances frees you from the costs and complexities of planning, purchasing, and maintaining hardware and transforms what are commonly large fixed costs into much smaller variable costs. On-Demand instances also remove the need to buy “safety net” capacity to handle periodic traffic spikes.

• Reserved Instances—Reserved Instances provide you with a significant discount (up to 75%) compared to On-Demand instance pricing. You have the flexibility to change families, operating system types, and tenancies while benefiting from Reserved Instance pricing when you use convertible Reserved Instances.

• Spot Instances—Spot Instances allow you to bid on spare Amazon EC2 computing capacity. Since Spot instances are often available at a discount compared to On-Demand pricing, you can significantly reduce the cost of running your applications, grow your application’s compute capacity and throughput for the same budget, and enable new types of cloud computing applications.