Initially, EC2 used
Xen virtualization exclusively. However, on November 6, 2017, Amazon announced the new C5 family of instances that were based on a custom architecture around the
KVM hypervisor, called Nitro. Each virtual machine, called an "instance", functions as a
virtual private server. Amazon sizes instances based on "Elastic Compute Units". The performance of otherwise identical virtual machines may vary. On November 28, 2017, AWS announced a bare-metal instance, a departure from exclusively offering virtualized instance types. As of January 2019, the following instance types were offered: • General Purpose: A1, T3, T2, M5, M5a, M4, T3a • Compute Optimized: C5, C5n, C4 • Memory Optimized: R5, R5a, R4, X1e, X1, High Memory, z1d • Accelerated Computing: P3, P2, G3, F1 • Storage Optimized: H1, I3, D2 , the following payment methods by instance were offered: • On-demand: pay by the hour without commitment. • Reserved: rent instances with one-time payment receiving discounts on the hourly charge. • Spot: bid-based service: runs the jobs only if the spot price is below the bid specified by bidder. The spot price is claimed to be supply-demand based, however a 2011 study concluded that the price was generally not set to clear the market, but was dominated by an undisclosed
reserve price. In 2025, AWS expanded EC2 with the compute-optimized
C8gn family, powered by Graviton4 and offering up to 600 Gbit/s network bandwidth (about 30% higher compute performance than C7gn), and introduced
G6f fractional-GPU instances that let customers provision one-eighth, one-quarter, or one-half of an NVIDIA L4 GPU for right-sized graphics/ML workloads.
Cost , Amazon charged about $0.0058 per hour ($4.176 per month) for the smallest "Nano Instance" (t2.nano) virtual machine running Linux or Windows. Storage-optimized instances cost as much as $4.992 per hour (i3.16xlarge). "Reserved" instances can go as low as $2.50 per month for a three-year prepaid plan. The data transfer charge ranges from free to $0.12 per gigabyte, depending on the direction and monthly volume (inbound data transfer is free on all AWS services
Free tier Amazon offered a bundle of free resource credits to new account holders. The credits are designed to run a "micro" sized server, storage (EBS), and bandwidth for one year. Unused credits cannot be carried over from one month to the next.
Reserved instances Reserved instances enable EC2 or RDS service users to reserve an instance for one or three years. The corresponding hourly rate charged by Amazon to operate the instance is 35 to 75% lower than the rate charged for on-demand instances. Reserved instances can be purchased with three different payment options: All Upfront, Partial Upfront and No Upfront. The different purchase options allow for different structuring of payment models, with a larger discount given to customers that pay their reservation upfront. Reserved Instances are purchased based on a resource commitment. These reservations are made based on an instance type and a count of that instance type. For example, you could reserve 100 i3.large instances for a 3-year term. In September 2016, AWS announced several enhancements to Reserved instances, introducing a new feature called scope and a new reservation type called a Convertible. In October 2017, AWS announced the allowance to subdivide the instances purchased for more flexibility.
Spot instances Cloud providers maintain large amounts of excess capacity they have to sell or risk incurring losses. Amazon EC2 Spot instances are spare compute capacity in the AWS cloud available at up to 90% discount compared to On-Demand prices.
Savings Plans In November 2019, Amazon announced Savings Plans. Savings Plans are an alternative to Reserved Instances that come in two different plan types: Compute Savings Plans and EC2 Instances Savings Plans. Compute Savings Plans allow an organization to commit to EC2 and Fargate usage with the freedom to change region, family, size, availability zone, OS and tenancy inside the lifespan of the commitment. EC2 Instance Savings plans provide a larger discount than Compute Savings Plans but are less flexible meaning a user must commit to individual instance families within a region to take advantage, but with the freedom to change instances within the family in that region. AWS uses the Cost Explorer to automatically calculate recommendations for the commitments you should make how that commitment will look like as a monthly charge on your AWS bill. AWS Savings Plans are purchased based on hourly spend commitment. This hourly commitment is made using the discounted pricing of the savings plan you are purchasing. For example, you could commit to spending $5 per hour, on a Compute Savings Plan, for a 3-year term. ==Features==