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Difficulty: MediumAWS Pricing Models

A logistics company runs a legacy enterprise resource planning (ERP) application on a single Amazon EC2 instance. The application must run continuously 24/7 with a stable, predictable workload. Due to a planned database migration to a serverless architecture in six months, the company cannot commit to a one-year or three-year contract. Additionally, the workload cannot tolerate any interruptions. Which EC2 pricing model is the most cost-effective option for this scenario?

  1. On-Demand InstancesAnswer
  2. B
    Spot Instances
  3. C
    Three-year Reserved Instances
  4. D
    All Upfront Reserved Instances to shift the computing costs from operating expenses (OpEx) to capital expenses (CapEx)

Answer

On-Demand Instances
On-Demand Instances are the most cost-effective option because they require no long-term commitment (fitting the six-month migration window) and provide uninterrupted compute capacity, which is required for the critical ERP application.

Step-by-Step Solution

1
Analyze the workload requirements and identify key constraints.
The workload must run 24/7 without interruption (eliminating Spot Instances) and has a lifetime of only six months.
Understanding the timeline and interruption tolerance narrows down the applicable pricing models.
2
Evaluate the commitment-based pricing options against the project duration constraint.
Reserved Instances and Savings Plans require a minimum commitment of one year, leaving six months of unused capacity.
Pricing options must be evaluated for overall cost-effectiveness over the entire six-month period.
3
Compare the remaining options to find the most cost-effective and flexible model.
On-Demand Instances allow paying only for the active six months of usage without any long-term commitment or penalty.
On-Demand is the optimal choice when the workload duration is shorter than the minimum commitment period of Reserved Instances/Savings Plans and cannot tolerate interruptions.

Key Concept

Matching application workload characteristics and project timelines to the appropriate EC2 pricing model.
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Topics

AWS Pricing Models

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