AWS Spot Instances - Reducing EC2 Costs up to 90%
Tags: aws, cloud
Published: 2023-07-03 22:33:25

Leveraging the most cost-effective resources while maintaining high performance is key to successful cloud architecture. AWS Spot Instances offer a way to achieve this balance, allowing you to utilize spare computing power at up to 90% less than standard costs. In this detailed guide, we'll explore the intricacies of Spot Instances, how to use them, and how they can significantly reduce your Amazon EC2 costs.

## **What are Spot Instances in AWS EC2?**

Spot Instances are a feature of Amazon Web Services (AWS) associated with the Elastic Compute Cloud (EC2). Spot Instances allow users to leverage unused EC2 capacity in the AWS cloud. This is offered at substantially reduced rates, often resulting in savings of up to 90% compared to On-Demand prices.

Spot Instances operate identically to On-Demand instances. However, the critical differences lie in the pricing structure and availability. Spot Instances' cost, also known as spot pricing, varies based on the real-time supply and demand for AWS's unused capacity. This means the price fluctuates over time, and unlike On-Demand instances, Spot Instances can be interrupted by AWS with a two-minute notice. This interruption happens when AWS needs to reclaim capacity or if the current spot price goes above the maximum price you've set.

It's essential to understand that the nature of Spot Instances means that they're ephemeral. While they offer a fantastic way to save on computing costs, they do come with the risk of sudden termination. As such, Spot Instances are ideal for fault-tolerant and flexible applications.

## **Why use AWS Spot Instances?**

Spot Instances are a fantastic resource for the right applications and come with several benefits.

1. **Cost-Effective**: One of the main attractions of Spot Instances is the cost. They can significantly lower your Amazon EC2 costs since they utilize spare EC2 capacity at a much lower price point. When compared to On-Demand Instance pricing, you can achieve savings of up to 90%.
    
2. **Scaling Your Computing Power**: Given their lower costs, Spot Instances allow you to augment your computational capacity for the same budget significantly. This makes them particularly attractive for scalable, fault-tolerant applications that can benefit from increased computing power without increasing costs.
    
3. **Flexibility**: Spot Instances are available for all types of EC2 instances. This flexibility allows you to select the right Spot Instance that best fits your application requirements in terms of memory, compute, and storage.
    
4. **Integration with AWS Services**: Spot Instances are integrated seamlessly with a variety of AWS services. They work with AWS Auto Scaling, Amazon EMR, Amazon ECS, and AWS CloudFormation. These integrations make Spot Instances even more convenient as they can be easily managed, scaled, and utilized across a wide range of applications.
    

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## **When should you use AWS Spot Instances?**

While Spot Instances provide cost-saving benefits, they are not suitable for every type of workload. The key lies in understanding when to use Spot Instances effectively. They are best suited for applications with flexible start and end times, applications that are designed to be fault-tolerant, and applications that can handle sporadic interruptions.

Typically, workloads that are suitable for Spot Instances include big data processing jobs, containerized workloads, continuous integration and continuous delivery (CI/CD) pipelines, web services, high-performance computing (HPC), and testing & development environments. They are not recommended for mission-critical jobs that require continuous compute and cannot handle interruptions.

### **AWS Spot Instances pricing**

The pricing for Spot Instances is dynamic and fluctuates based on the supply and demand for unused AWS EC2 capacity. When you request a Spot Instance, you specify the maximum price you are willing to pay per instance hour. If the current Spot price is less than or equal to your maximum price, your request is fulfilled, and your instances run until either you decide to terminate them, the Spot price goes above your maximum price, or when AWS needs to reclaim the capacity.

This spot pricing structure makes Spot Instances an excellent option for cost-saving, but it does require careful planning to ensure that your application can handle the potential for sudden interruptions.

### **AWS Spot Instances pricing history**

AWS provides the Spot Instance pricing history in the AWS Management Console. This history shows the Spot price for each instance type in each Availability Zone for the past 90 days. Analyzing this data can help you understand the price trends for different instance types and make more informed decisions when setting your maximum price for Spot Instances.

## **How AWS Spot Instances work**

To fully grasp the benefits and potential use cases for AWS Spot Instances, it's important to understand the mechanics behind them. From Spot Instance requests to interruptions and managing instance limits, let's delve into the workings of AWS Spot Instances.

### **Spot Instance Request**

A Spot Instance request is the first step towards acquiring a Spot Instance. You can place a request through the AWS Management Console, AWS CLI, or SDKs. When placing a request, you specify the maximum price you're willing to pay per hour, per instance. If your bid price is higher than the current Spot price, your request is fulfilled and your instances run until you decide to terminate them, the Spot price goes above your maximum price, or when AWS needs the capacity back.

### **Spot Instance Interruptions**

Spot Instance interruptions are an integral part of the Spot Instance lifecycle. AWS can interrupt a Spot Instance for one of three reasons: if the current Spot price exceeds your maximum bid, if AWS requires the capacity back for On-Demand usage, or if the Spot Instance has been running for more than six hours. When AWS decides to interrupt your Spot Instances, a two-minute warning is sent to your instances, allowing you to save and checkpoint your work.

### **Rebalance Recommendations**

AWS provides rebalance recommendations to help manage Spot Instances effectively. A rebalance recommendation is a signal provided by AWS that indicates a Spot Instance is at an elevated risk of interruption. By monitoring these recommendations, you can proactively manage your Spot Instances and take action, like starting new instances or saving the state of your current instances, before an interruption occurs.

### **Spot Instance Advisor**

The Spot Instance Advisor is a tool provided by AWS to help you identify the most cost-effective Spot Instances. The tool provides information about savings compared to On-Demand prices, frequency of interruption, and available Spot Instance types across all regions. This can assist you in making informed decisions when choosing Spot Instances.

### **Spot Instance Limits**

Spot Instance limits are based on the number of vCPUs that you use in your Spot Instances. Each AWS account has a Spot Instance limit per region, and once you reach this limit, you will not be able to launch additional Spot Instances in that region. You can request an increase in your Spot Instance limit if necessary.

### **Burstable Performance Instances**

Burstable Performance Instances, or T2 and T3 instances, provide a baseline level of CPU performance with the ability to burst above the baseline. These instances are an excellent choice for workloads that don't use the full CPU often or consistently but occasionally need to burst. When using these instances as Spot Instances, you can enjoy cost savings for workloads with flexible CPU requirements.

### **AWS Spot Fleet**

A Spot Fleet is a set of Spot Instances, and optionally On-Demand Instances, that is launched based on criteria that you specify. Spot Fleet deploys the optimal combination of instance types and Availability Zones based on your preferences to achieve the desired capacity. It allows you to diversify your Spot Instances across multiple instance types and Availability Zones to optimize cost and maintain high availability. This can be a powerful tool for managing larger sets of Spot Instances.

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What is the difference between spot instances and reserved instances?\*\*

Spot Instances and Reserved Instances are two different pricing models offered by AWS, each with their unique attributes and use cases.

Reserved Instances (RIs) are ideal for predictable workloads and offer significant discounts compared to On-Demand pricing. When you purchase a Reserved Instance, you reserve capacity for specific instances in an AWS region for 1 or 3 years. This model offers cost predictability, capacity reservation, and substantial cost savings.

On the other hand, Spot Instances allow you to use spare EC2 computing capacity at up to 90% less than On-Demand rates. However, these instances can be interrupted by AWS, meaning they are less reliable for critical, uninterrupted workloads. Spot Instances are better suited for flexible, fault-tolerant, or time-insensitive tasks.

## **What is the difference between spot instances and on-demand instances?**

On-Demand Instances and Spot Instances differ mainly in pricing structure and availability.

On-Demand Instances let you pay for compute capacity by the hour or second with no long-term commitments or upfront payments. You retain control and keep the instances for as long as you need, offering flexibility and ease-of-use. On-Demand Instances are ideal for short-term, irregular workloads that cannot be interrupted.

Spot Instances, meanwhile, offer the opportunity to request spare Amazon EC2 computing capacity at significantly reduced rates. However, they come with the possibility of being interrupted by AWS if your bid price is exceeded or if the capacity is needed elsewhere. Spot Instances are a cost-effective choice for applications with flexible start and end times or those that are fault-tolerant.

## **Spot Instance Best Practices**

While Spot Instances offer significant cost benefits, they require thoughtful management and strategic application. Here are some best practices for using AWS Spot Instances:

1. **Use for Suitable Workloads**: Spot Instances are ideal for flexible, interruptible workloads or those that aren't time-sensitive. Jobs such as big data analysis, containerized workloads, CI/CD pipelines, testing environments, and stateless web servers are prime candidates.
    
2. **Bid Wisely**: When placing a Spot Instance request, bid a price that is higher than the current Spot price to increase the chances of your request being fulfilled. Remember, however, that a higher bid price increases the chances of your instance continuing to run but also increases your costs.
    
3. **Diversify Your Spot Instances**: Diversify across as many different instance types, sizes, and Availability Zones as your application can tolerate. This increases the odds of your spot instance request being fulfilled and helps maintain application availability during spot price fluctuations.
    
4. **Monitor and Respond to Spot Instance Interruptions**: Spot Instances come with a two-minute interruption notice. Monitor for these interruptions and design your applications to checkpoint, save state, and move work to a new spot instance or On-Demand Instance when required.
    
5. **Use Spot Fleets**: Spot Fleets are a collection of Spot Instances and potentially On-Demand Instances. They allow you to manage your instances and diversify across different instance types, purchase options and Availability Zones automatically.
    

While Spot Instances offer an excellent opportunity to save on costs, understanding and planning for their inherent volatility is key. A good AWS architecture should consider a mix of On-Demand, Reserved, and Spot Instances to achieve availability goals while staying cost-efficient.

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