VM and EC2 Cost Comparison
Instance pricing across on demand, reserved and spot. A reservation is billed whether the instance runs or not, so below roughly sixty percent utilisation on demand is cheaper despite the higher rate.
Also called: instance pricing comparison, reserved vs on demand.
Three year reserved at $10,512.00 a month. On demand is $23,360.00, one year reserved $15,184.00, three year $10,512.00 and spot $5,840.00. At 100% utilisation, the workload does not tolerate interruption, so spot is excluded from the comparison.
How this is calculated
On demand bills per hour used. A reservation bills the full period regardless of use, so the discount only pays above a utilisation threshold: at a thirty-five percent discount, the break-even is around sixty-five percent utilisation. Spot instances offer the deepest discount and can be reclaimed at short notice, which suits batch and stateless work and not a database. The comparison here holds the instance constant so the pricing model is the only variable.
a reservation is billed whether used or not, so it only wins above a utilisation threshold- d
- Discount
Method and limits
What it assumes
- A single instance type running for the stated share of the month.
What it deliberately does not model
- Spot availability and pricing vary by region and instance type and can disappear entirely.
- Reservations may be convertible or transferable, which changes their risk profile.
- Savings plans price differently again from instance reservations.
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Frequently asked questions
- When does a reservation stop paying?
- Below the utilisation break-even, which at a thirty-five percent discount is around sixty-five percent. A reservation on an instance you run half the month costs more than on demand.
- What suits spot pricing?
- Anything interruptible: batch processing, CI runners, stateless workers. Not a database, and not anything where a two minute eviction notice is a problem.