On-Demand Instances are a pricing model offered by Amazon Web Services (AWS) that allows users to pay for compute capacity by the hour or second, depending on the instance type. This flexible approach eliminates the need for long-term commitments or upfront payments, making it ideal for application…On-Demand Instances are a pricing model offered by Amazon Web Services (AWS) that allows users to pay for compute capacity by the hour or second, depending on the instance type. This flexible approach eliminates the need for long-term commitments or upfront payments, making it ideal for applications with unpredictable workloads or short-term projects.
With On-Demand Instances, you only pay for what you use. There are no minimum fees, and you can increase or decrease your compute capacity based on your application's demands. This pay-as-you-go model provides maximum flexibility for businesses that experience variable traffic patterns or are testing new applications.
Key characteristics of On-Demand Instances include:
1. **No Upfront Costs**: You are not required to make any advance payments. Billing begins when the instance launches and stops when the instance is terminated or stopped.
2. **Hourly or Per-Second Billing**: Linux instances are billed per second with a minimum of 60 seconds, while Windows instances are typically billed per hour.
3. **Scalability**: You can launch as many instances as needed and terminate them when they are no longer required, providing excellent scalability for dynamic workloads.
4. **No Long-Term Commitments**: Unlike Reserved Instances, On-Demand pricing does not require one or three-year contracts.
On-Demand Instances are best suited for:
- Applications being developed or tested
- Workloads with unpredictable usage patterns
- Short-term projects or spiky traffic requirements
- Users who prefer flexibility over cost optimization
While On-Demand offers convenience, it typically costs more than Reserved Instances or Spot Instances. Organizations with predictable, steady-state workloads may find better value with alternative pricing models. Understanding On-Demand pricing is essential for the AWS Cloud Practitioner exam and effective cloud cost management.
On-Demand Instances: Complete Guide for AWS Cloud Practitioner Exam
What Are On-Demand Instances?
On-Demand Instances are a pricing model for Amazon EC2 where you pay for compute capacity by the hour or second with no long-term commitments or upfront payments. You only pay for what you use, making it the most flexible purchasing option available in AWS.
Why Are On-Demand Instances Important?
On-Demand Instances are crucial because they provide:
• Maximum Flexibility - Start and stop instances whenever needed • No Commitments - No contracts or minimum usage requirements • Predictable Pricing - Fixed hourly or per-second rates • Instant Scalability - Launch as many instances as you need • No Upfront Costs - Pay only after you use the resources
How On-Demand Instances Work
1. You launch an EC2 instance through the AWS Console, CLI, or API 2. AWS provisions the instance from available capacity 3. You are charged based on the instance type and running time 4. Billing occurs per second (minimum 60 seconds) for Linux instances 5. Windows instances are billed per hour 6. You can terminate the instance at any time and billing stops
Best Use Cases for On-Demand Instances
• Applications with unpredictable workloads • Short-term or irregular workloads • Applications being developed or tested for the first time • Workloads that cannot be interrupted • Spiky traffic patterns that are hard to predict
Comparing On-Demand to Other Pricing Models
vs Reserved Instances: On-Demand costs more but offers flexibility; Reserved requires 1-3 year commitment for discounts up to 72%
vs Spot Instances: On-Demand is more reliable but costs more; Spot can be interrupted but offers up to 90% discount
vs Savings Plans: On-Demand has no commitment; Savings Plans require hourly spend commitment for discounts
Exam Tips: Answering Questions on On-Demand Instances
1. Look for keywords indicating flexibility needs: When questions mention unpredictable workloads, testing environments, or no upfront payment requirements, On-Demand is typically the correct answer.
2. Recognize cost comparison scenarios: On-Demand is the most expensive per-hour option but offers the most flexibility. If cost optimization is the primary concern and workloads are predictable, look for Reserved or Savings Plans instead.
3. Understand the no-commitment principle: Questions emphasizing no long-term contracts, no upfront fees, or pay-as-you-go models point toward On-Demand.
4. Know when NOT to choose On-Demand: - Steady-state workloads running 24/7 = Reserved Instances - Fault-tolerant, flexible workloads = Spot Instances - Predictable compute usage = Savings Plans
5. Watch for trick questions: If a question asks about the most cost-effective solution for a predictable, long-running workload, On-Demand is likely NOT the answer despite being easy to use.
6. Remember billing details: Per-second billing applies to Linux; per-hour billing applies to Windows. This detail occasionally appears in exam questions.
7. Associate On-Demand with development and testing: When scenarios describe new applications, proof of concepts, or uncertain resource requirements, On-Demand is ideal.
Key Exam Takeaways
• On-Demand = Maximum flexibility, no commitments, higher cost • Best for: unpredictable, short-term, or interruptible workloads • Not ideal for: steady-state, predictable, long-running applications • No upfront payment required • Pay only for what you use