TL;DR

Amazon EC2 Overview

• Amazon EC2 provides resizable compute capacity in the cloud, allowing users to provision virtual servers called EC2 instances
• EC2 instances can be launched, stopped, or terminated as needed, with pay-per-use pricing

Instance Configuration

• Amazon Machine Images (AMIs) are used to select the operating system and pre-installed software for EC2 instances
• EC2 instance types are optimized for different workloads, offering various combinations of CPU, memory, storage, and networking capacity
• Instances can be placed in specific Availability Zones, with at least two instances in separate zones recommended for high availability

EC2 Pricing Options

• On-Demand Instances offer pay-as-you-go pricing with no upfront costs or long-term commitments
• Spot Instances allow users to bid on spare EC2 capacity, potentially providing significant cost savings
• Reserved Instances and Savings Plans offer discounted rates for committing to consistent usage over 1 or 3-year terms

I. Servers and server types

The first building block that you need to host an application is a server. Servers can usually handle HTTP requests and send responses to clients following the client-server model. Although any API-based communication also falls under this model.

A client is a person or computer that sends a request. A server handling the requests is a computer, or collection of computers, connected to the internet serving websites to internet users. Servers power your application by providing CPU, memory, and networking capacity to process users’ requests and transform them into responses. For context, common HTTP servers include the following:

• Windows options, such as Internet Information Services (IIS)
• Linux options, such as Apache HTTP Server, Nginx, and Apache Tomcat

To run an HTTP server on AWS, you must find a service that provides compute power in the AWS Management Console. You can view the complete list of AWS compute services when you log in to the console.

If you’re responsible for setting up servers on AWS to run your infrastructure, you have many compute options. First, you need to know which compute service to use for each use case. At a fundamental level, three types of compute options are available: virtual machines (VMs), container services, and serverless.

If you have prior infrastructure knowledge, a virtual machine will often be the easiest compute option to understand. This is because a virtual machine emulates a physical server and allows you to install an HTTP server to run your applications, for example. To run virtual machines, you install a hypervisor on a host machine. In its simplest form, a hypervisor is software or firmware that makes it possible to share physical hardware resources across one or more virtual machines. The hypervisor provisions the resources to create and run your VMs.

In AWS, Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides secure and resizable compute capacity in the cloud. You can provision virtual servers called EC2 instances. Behind the scenes, AWS operates and manages the host machines and the hypervisor layer. AWS also installs the virtual machine operating system, called the guest operating system.

Beneath the surface, some AWS compute services use Amazon EC2 or use virtualization concepts. You should understand this service before advancing to container services and serverless compute.

II. Amazon EC2

Amazon EC2 is a web service that provides secure, resizable compute capacity in the cloud. With this service, you can provision virtual servers called EC2 instances.

Amazon Elastic Compute Cloud (Amazon EC2)

With Amazon EC2, you can do the following:

• Provision and launch one or more EC2 instances in minutes.
• Stop or shut down EC2 instances when you finish running a workload.
• Pay by the hour or second for each instance type (minimum of 60 seconds).

You can create and manage EC2 instances through the AWS Management Console, AWS CLI, AWS SDKs, automation tools, and infrastructure orchestration services.

To create an EC2 instance, you must define the following:

• Hardware specifications: CPU, memory, network, and storage
• Logical configurations: Networking location, firewall rules, authentication, and the operating system of your choice

III. Amazon Machine Image

When launching an EC2 instance, the first setting you configure is which operating system you want by selecting an Amazon Machine Image (AMI).

In the traditional infrastructure world, spinning up a server consists of installing an operating system from installation disks, drives, or wizards over the network. In the AWS Cloud, the operating system installation is not your responsibility. Instead, it's built into the AMI that you choose.

An AMI includes the operating system, storage mapping, architecture type, launch permissions, and any additional preinstalled software applications.

Relationship between AMIs and EC2 instances

EC2 instances are live instantiations (or versions) of what is defined in an AMI, as a cake is a live instantiation of a cake recipe. If you are familiar with software development, you can also see this kind of relationship between a class and an object. In this case, the AMI is how you model and define your instance. The EC2 instance is the entity you interact with, where you can install your web server and serve your content to users.

When you launch a new instance, AWS allocates a virtual machine that runs on a hypervisor. Then the AMI that you selected is copied to the root device volume, which contains the image that is used to boot the volume. In the end, you get a server that you can connect to and install packages and additional software on. In the example, you install a web server along with the properly configured source code of your employee directory application.

One advantage of using AMIs is that they are reusable. You might choose a Linux-based AMI and configure the HTTP server, application packages, and additional software that you need to run your application. If you want to create another EC2 instance with the same configurations, you could create and configure a new EC2 instance to match the first instance. Or you could create an AMI from your running instance and use the AMI to start a new instance. That way, your new instance would have the same configurations as your current instance because the configurations set in the AMIs are the same.

Each AMI in the AWS Management Console has an AMI ID, which is prefixed by ami-, followed by a random hash of numbers and letters. The IDs are unique to each AWS Region.

An AMI includes the operating system, storage mapping, architecture type, launch permissions, and any additional preinstalled software applications.

IV. Configuring EC2

Now that you know how to select an operating system for your EC2 instance, you are ready to choose other configurations to create your EC2 instance, such as the instance type, network, and storage.

For an application like the employee directory application, you need instances with enough capacity to process customer requests. Your instance sizing will depend on both the demands of your application and the anticipated size of your user base.

Forecasting server capacity for an on-premises application requires difficult decisions involving significant upfront capital spending. In contrast, changes to the allocation of your cloud-based services can be made with a simple API call. Because of the AWS pay-as-you-go model, you can match your infrastructure capacity to your application’s demand, instead of the other way around.

Amazon EC2 instance types

EC2 instances are a combination of virtual processors (vCPUs), memory, network, and, in some cases, instance storage and graphics processing units (GPUs). When you create an EC2 instance, you need to choose how much you need of each of these components.

AWS offers a variety of instances that differ based on performance. Some instances provide more capacity than others. To get an overview of the capacity details for a particular instance, you should look at the instance type. Instance types consist of a prefix identifying the type of workloads they’re optimized for, followed by a size. For example, the instance type c5n.xlarge can be broken down as follows:

• First position – The first position, c, indicates the instance family. This indicates that this instance belongs to the compute optimized family.
• Second position – The second position, 5, indicates the generation of the instance. This instance belongs to the fifth generation of instances.
• Remaining letters before the period – In this case, n indicates additional attributes, such as local NVMe storage.
• After the period – After the period, xlarge indicates the instance size. In this example, it's xlarge.

Instance families

Each instance family is optimized to fit different use cases. The following table describes instance families and some typical workloads.

V. EC2 instance locations

Unless otherwise specified, when you launch EC2 instances, they are placed in a default virtual private cloud (VPC). The default VPC is suitable for getting started quickly and launching public EC2 instances without having to create and configure your own VPC.

Any resource that you put inside the default VPC will be public and accessible by the internet, so you shouldn’t place any customer data or private information in it.

When you get more comfortable with networking on AWS, you should change this default setting to choose your own custom VPCs and restrict access with additional routing and connectivity mechanisms.

Architecting for high availability

In the network, your instance resides in an Availability Zone of your choice. As you learned previously, AWS services that are scoped at the Availability Zone level must be architected with high availability in mind.

When architecting any application for high availability, consider using at least two EC2 instances in two separate Availability Zones. 

Although EC2 instances are typically reliable, two are better than one, and three are better than two. Specifying the instance size gives you an advantage when designing your architecture because you can use more smaller instances rather than a few larger ones.

If your frontend only has a single instance and the instance fails, your application goes down. Alternatively, if your workload is distributed across 10 instances and one fails, you lose only 10 percent of your fleet, and your application availability is hardly affected.

When architecting any application for high availability, consider using at least two EC2 instances in two separate Availability Zones. ­

VI. EC2 instance lifecycle

An EC2 instance transitions between different states from the moment you create it until its termination.

1. When you launch an instance, it enters the pending state. When an instance is pending, billing has not started. At this stage, the instance is preparing to enter the running state. Pending is where AWS performs all actions needed to set up an instance, such as copying the AMI content to the root device and allocating the necessary networking components.
2. When your instance is running, it's ready to use. This is also the stage where billing begins. As soon as an instance is running, you can take other actions on the instance, such as reboot, terminate, stop, and stop-hibernate.
3. When you reboot an instance, it’s different than performing a stop action and then a start action. Rebooting an instance is equivalent to rebooting an operating system. The instance keeps its public DNS name (IPv4) and private and public IPv4 addresses. An IPv6 address (if applicable) remains on the same host computer and maintains its public and private IP address, in addition to any data on its instance store volumes.
4. When you stop your instance, it enters the stopping and then stopped state. This is similar to when you shut down your laptop. You can stop and start an instance if it has an Amazon Elastic Block Store (Amazon EBS) volume as its root device. When you stop and start an instance, your instance can be placed on a new underlying physical server. Your instance retains its private IPv4 addresses and if your instance has an IPv6 address, it retains its IPv6 address. When you put the instance into stop-hibernate, the instance enters the stopped state, but saves the last information or content into memory, so that the start process is faster.
5. When you terminate an instance, the instance stores are erased, and you lose both the public IP address and private IP address of the machine. Termination of an instance means that you can no longer access the machine. As soon as the status of an instance changes to shutting down or terminated, you stop incurring charges for that instance.

Difference between stop and stop-hibernate

When you stop an instance, it enters the stopping state until it reaches the stopped state. AWS does not charge usage or data transfer fees for your instance after you stop it. But storage for any Amazon EBS volumes is still charged. While your instance is in the stopped state, you can modify some attributes, like the instance type. When you stop your instance, the data from the instance memory (RAM) is lost.

When you stop-hibernate an instance, Amazon EC2 signals the operating system to perform hibernation (suspend-to-disk), which saves the contents from the instance memory (RAM) to the EBS root volume. You can hibernate an instance only if hibernation is turned on and the instance meets the hibernation prerequisites.

VII. EC2 Pricing

One of the ways to reduce costs with Amazon EC2 is to choose the right pricing option for the way that your applications run. AWS offers a variety of pricing options to address different workload scenarios.

On-Demand Instances

With On-Demand Instances, you pay for compute capacity per hour or per second, depending on which instances that you run. There are no long-term commitments or upfront payments required. Billing begins whenever the instance is running, and billing stops when the instance is in a stopped or terminated state. You can increase or decrease your compute capacity to meet the demands of your application and only pay the specified hourly rates for the instance that you use.

On-Demand Instances are recommended for the following use cases:

• Users who prefer the low cost and flexibility of Amazon EC2 without upfront payment or long-term commitments
• Applications with short-term, spiky, or unpredictable workloads that cannot be interrupted
• Applications being developed or tested on Amazon EC2 for the first time

Spot Instances

For applications that have flexible start and end times, Amazon EC2 offers the Spot Instances option. With Amazon EC2 Spot Instances, you can request spare Amazon EC2 computing capacity for up to 90 percent off the On-Demand price. Spot Instances are recommended for the following use cases:

• Applications that have flexible start and end times
• Applications that are only feasible at very low compute prices
• Users with fault-tolerant or stateless workloads

With Spot Instances, you set a limit on how much you want to pay for the instance hour. This is compared against the current Spot price that AWS determines. Spot Instance prices adjust gradually based on long-term trends in supply and demand for Spot Instance capacity. If the amount that you pay is more than the current Spot price and there is capacity, you will receive an instance.

Savings Plans

Savings Plans are a flexible pricing model that offers low usage prices for a 1-year or 3-year term commitment to a consistent amount of usage. Savings Plans apply to Amazon EC2, AWS Lambda, and AWS Fargate usage and provide up to 72 percent savings on AWS compute usage.

For workloads that have predictable and consistent usage, Savings Plans can provide significant savings compared to On-Demand Instances. Savings Plans are recommended for the following use cases:

• Workloads with a consistent and steady-state usage
• Customers who want to use different instance types and compute solutions across different locations
• Customers who can make monetary commitment to use Amazon EC2 over a 1-year or 3-year term

Reserved Instances

For applications with steady state usage that might require reserved capacity, Amazon EC2 offers the Reserved Instances option. With this option, you save up to 72 percent compared to On-Demand Instance pricing. You can choose between three payment options: All Upfront, Partial Upfront, or No Upfront. You can select either a 1-year or 3-year term for each of these options.

With Reserved Instances, you can choose the type that best fits your applications needs.

• Standard Reserved Instances: These provide the most significant discount (up to 72 percent off On-Demand pricing) and are best suited for steady-state usage.
• Convertible Reserved Instances: These provide a discount (up to 54 percent off On-Demand pricing) and the capability to change the attributes of the Reserved Instance if the exchange results in the creation of Reserved Instances of equal or greater value. Like Standard Reserved Instances, Convertible Reserved Instances are best suited for steady-state usage.
• Scheduled Reserved Instances: These are available to launch within the time windows that you reserve. With this option, you can match your capacity reservation to a predictable recurring schedule that only requires a fraction of a day, a week, or a month.

Dedicated Hosts

A Dedicated Host is a physical Amazon EC2 server that is dedicated for your use. Dedicated Hosts can help you reduce costs because you can use your existing server-bound software licenses, such as Windows Server, SQL Server, and Oracle licenses. And they can also help you meet compliance requirements. Amazon EC2 Dedicated Host is also integrated with AWS License Manager, a service that helps you manage your software licenses, including Microsoft Windows Server and Microsoft SQL Server licenses.

• Dedicated Hosts can be purchased on demand (hourly).
• Dedicated Hosts can be purchased as a Reservation for up to 70 percent off the On-Demand price.

Thank you for reading! We hope this comprehensive guide on AWS Compute - Part 1: virtual machines (VMs) has been informative and helpful. Your interest in expanding your knowledge about Amazon EC2 instances, their types, pricing options, and best practices is appreciated. Stay tuned for more insightful content on cloud computing and AWS services.