CLF-C02 - Billing, Pricing, and Support - Section 4.1

Compare AWS pricing models, including On-Demand Instances, Reserved Instances, Spot Instances, Savings Plans and Dedicated Hosts, and understand data transfer and storage tier charges.

Compare AWS EC2 pricing models: On-Demand for flexible short-term use; Reserved Instances and Savings Plans for predictable workloads that justify a one- or three-year commitment for discounts; Spot Instances for interruptible, fault-tolerant work at the lowest price; and Dedicated Hosts for licensing or compliance needs. Recognise that data transfer and storage tiers also affect cost.

On-Demand InstancesReserved InstancesSpot InstancesSavings Plans

Practice question for this objective

Free sampleBilling, Pricing, and Supportmedium

A company runs a steady, predictable baseline of Amazon EC2 compute that it expects to keep for the next three years, and it wants a lower rate than On-Demand by making a term commitment. Which TWO pricing models reward such a one-year or three-year commitment with a discount? (Select TWO.)

  • AReserved Instances, which grant a lower rate in exchange for committing to a one-year or three-year term. Correct
  • BOn-Demand Instances, which charge the standard rate by the second with no term commitment of any kind.
  • CSavings Plans, which give a discount in return for committing to a steady amount of spend per hour for a term. Correct
  • DSpot Instances, which sell spare capacity at a deep discount that AWS can reclaim at very short notice.
  • EDedicated Hosts, which provide a whole physical server for one tenant to satisfy licensing or isolation rules.
Reserved Instances and Savings Plans both lower the rate below On-Demand in return for a one-year or three-year commitment, matching steady predictable baseline usage. A steady multi-year baseline is best served by a commitment-based model: Reserved Instances commit to a specific instance term for a discount, while Savings Plans commit to an hourly spend amount for a term and apply the saving automatically; On-Demand carries no commitment and so no discount, Spot trades price for interruption, and Dedicated Hosts solve isolation rather than committed baseline cost.

Why A is correct: Reserved Instances trade a one-year or three-year term commitment for a discount, exactly matching the steady baseline described.

Why B is wrong: On-Demand is tempting for its flexibility but offers no commitment discount, so it costs more for a steady predictable baseline.

Why C is correct: Savings Plans reward an hourly spend commitment over a one-year or three-year term, fitting the predictable baseline at a lower rate.

Why D is wrong: Spot relies on interruptible spare capacity rather than a term commitment, so it does not suit an always-on baseline workload.

Why E is wrong: Dedicated Hosts address physical isolation and licensing, not a term-commitment discount on steady baseline compute.

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