Differentiate between on-demand instance and spot instance?

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Spot Instances  are spare unused EC2 instances which one can bid for. Once the bid exceeds the existing spot price (which changes in real-time based on demand and supply) the spot instance will be launched. If the spot price becomes more than the bid price then the instance can go away anytime and terminated within 2 minutes of notice. The best way to decide on the optimal bid price for a spot instance is to check the price history of last 90 days that is available on AWS console. The advantage of spot instances is that they are cost-effective and the drawback is that they can be terminated anytime. Spot instances are ideal to use when –

  • There are optional nice to have tasks.
  • You have flexible workloads which can be run when there is enough compute capacity.
  • Tasks that require extra computing capacity to improve performance.

On-demand instances are made available whenever you require them and you need to pay for the time you use them on an hourly basis. These instances can be released when they are no longer required and do not require any upfront commitment. The availability fo these instances is guaranteed by AWS unlike spot instances.

The best practice is to launch couple of on-demand instances which can maintain minimum level of guaranteed compute resources for the application and add-on few spot instances whenever there is an opportunity.

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