Explain On-Demand, Reserved, Spot, and Savings Plans pricing and when to use each.
AWS · Basic level
Answer
On-Demand is flexible pay-as-you-go, Reserved Instances and Savings Plans discount predictable usage, and Spot is cheap spare capacity that can be interrupted. I combine them based on workload predictability and interruption tolerance.
Technical explanation
Spot needs interruption handling and diversified instance types; commitments need coverage and utilization tracking.
Compute design should balance availability, scaling speed, startup time, instance limits, health checks, and deployment rollback, not just raw instance size.
Autoscaling and load balancing only work well when health checks reflect readiness and when applications externalize state.
Cost optimization should be tied to utilization data and workload tolerance for interruption, commitment, and architecture changes.
Hands-on example
1. Build a launch template or workload definition with IAM role, security groups, user data/bootstrap, health endpoint, and CloudWatch metrics.
2. Place compute behind an ALB/NLB or scaling group and run a controlled load test to observe scaling and health behavior.
3. Tune scaling policy, warmup/cooldown, target group health checks, and rollback procedure.
4. Compare cost and reliability after the test, then promote the configuration through IaC.
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