AWS Spot Instance pricing depends on the kind of Spot Instance and unique usage requirements. For an On-Demand model, discounts go up to 89 percent off. Reserved Instances, on the other hand, have discounts rooted in a commitment. Users commit to paying a given price for their Spot Instance usage. Because of the dynamic nature of the cloud, Spot Instance pricing varies based on demand, usage patterns, and time.
We notice the price of a Spot Instance on a Monday isn’t the same as the price on a Sunday from price history charts. However, cloud users can utilize the average spot price when making both short-term and long-term decisions.
AWS Reserved Instances vs. On-Demand
There are two types of Spot Instances: Reserved Instances and On-Demand Instances. Even though Reserved Instances are ideal for future use, you use On-Demand Instances on an ongoing basis.
It’s equally important to note that both Spot Instances have the same compute power, with price being the only varying factor.
Here are two pricing examples:
- Reserved Instance pricing. If you choose to pay upfront for a one-year term, AWS will give you a discount. Paying upfront is cheaper than the equivalent one-year term for On-Demand billing.
- On-Demand Pricing. On-Demand pricing bills on an hourly basis. Unlike Reserved Instances, users don’t calculate the number of instances they need. AWS will automatically assign the quantity based on existing market circumstances.
How the Pricing Works
Cloud users have to bid for Spot Instances. When the bid price goes higher than the market price, you’ll get the Spot Instance. For an On-Demand model, the bid price is the one users key-in. The On-Demand price is the average price paid by cloud users at that particular moment. Let’s say you bid at $10/hour, and the market price goes to $8 per hour. AWS will give you access to its infrastructure until the market price goes above your bid price.
Factors Affecting Spot Instance Prices
If the demand for Spot Instances is high, then prices will skyrocket. But as more competitors adopt cloud technology, AWS is likely to reduce Spot Instance prices and offer more discounts. Even if you make a three-year commitment on a Reserved Instance model, you can still cancel at any time and claim the latest offers.
It’s best to use Reserved Instances for production purposes and On-Demand instances for development and testing purposes.
There are several factors users have to keep in mind when thinking about Spot Instance prices. That’s why the nOps Spot Advisor combines all those factors to help you make cost-reducing decisions on Spot Instances.
With this tool, you can gain clear visibility into your day-to-day and month-to-month spending on Spot Instances.
The nOps Spot Advisor also highlights estimated savings you could have when you execute its Spot Instance recommendations. In addition, you can compare average Spot Instance prices across various AWS availability zones. Learn more on how the nOps Spot Advisor can optimize your Amazon Spot Instance pricing.