AWS Spot Instance - Working, Pricing and Benefits

Process Advisors

*Subject to Terms and Condition
AWS Spot Instances - Everything You Need to Know About It
Updated on 17th Aug, 23 5.5 K Views

AWS is amazing! It’s a platform for cloud computing that offers a plethora of services to support individuals and businesses in creating, deploying, and managing their applications. And one of the coolest services they offer is Spot Instances! In this blog post, we will explore AWS Spot Instances, their benefits, use cases, and associated practices that are commonly used in real life.

Here are the following topics we are going to discuss:

Check out this insightful video on AWS Tutorial for Beginners

Introduction to AWS Spot Instances

AWS Spot Instances are a type of computing instance offered by Amazon Web Services (AWS) that allows users to bid for unused EC2 (Elastic Compute Cloud) capacity at significantly reduced prices compared to on-demand instances. 

These instances are a cost-effective option for businesses and individuals who can be flexible with their computing needs and are willing to run their workloads on instances that may be interrupted at any time. 

Spot Instances is designed to manage diversified applications such as data analytics, batch processing, and high-performance computing, and can also be integrated with other AWS services such as Amazon Elastic Container Service (ECS) and Amazon Elastic Kubernetes Service (EKS). 

With their scalability and flexibility, Spot Instances offer a unique opportunity for users to optimize their computing costs while maintaining high levels of performance.

Do you need the best AWS training in your area? Attend the AWS Certification Training at Intellipaat immediately!

Prerequisite of AWS Spot Instances

The cloud computing industry regards AWS Spot Instances as highly advantageous and an invaluable resource for both individuals and businesses.

To begin with, Spot Instances offer a cost-effective option for computing needs, providing significant discounts in comparison to on-demand instances. This feature is particularly appealing to users who can adjust their computing requirements as needed, resulting in considerable cost savings, especially for large-scale computing resources.

Furthermore, Spot Instances provide scalability, allowing users to rapidly scale their computing resources up or down based on changing requirements. This functionality is especially beneficial for businesses that experience varying workloads since they can quickly adjust their resources to meet the demands of their applications.

Finally, Spot Instances are incredibly versatile, supporting an extensive range of workloads and applications, including high-performance computing and batch processing. These instances can also be seamlessly integrated with other AWS services such as ECS and EKS, providing users with the opportunity to create tailored computing environments that suit their specific requirements.

Working of an AWS Spot Instances

The working of AWS Spot Instances involve the process of businesses placing bids on available EC2 instances that are not in use. The bidding process is dictated by the laws of supply and demand, with the price of the instance determined by the highest bidder. 

As businesses bid on an instance, they stipulate the maximum price they are willing to pay for its use. If the bid surpasses the current market price, the business can use the instance for the duration that their bid outstrips the market price.

Nevertheless, if the market price escalates beyond the bid, the instance will be terminated, prompting the business to make a fresh bid if they wish to continue using the instance. Consequently, businesses should remain cognizant of the demand dynamics and adapt their bids accordingly. Hence, this is how an AWS Spot Instances works.

Interested in learning more? Go through this AWS Tutorial to gain a better understanding of AWS.

Get 100% Hike!

Master Most in Demand Skills Now !

AWS Spot Instances Pricing

The Pricing of AWS Spot Instances is reliant on the equilibrium between the available and the demanded instances. The highest bidder determines the cost of an instance. Businesses can make a bid on inactive EC2 instances, and they declare the highest amount they can pay for that instance. If the bid exceeds the current market rate, the business can utilize the instance at the bid price.

Usually, AWS Spot instance pricing is lower than the standard on-demand pricing. Nonetheless, the price is susceptible to variations as market demand changes. Therefore, businesses must stay informed of the demand pattern and amend their bids accordingly.

Benefits of an AWS Spot Instances

AWS Spot Instances present numerous advantages to businesses, including:

Benefits of AWS Spot Instances
  • Cost-Effectiveness: AWS Spot Instances offers businesses a cost-efficient means of utilizing AWS resources. The pricing is frequently lower than the standard on-demand pricing, which allows businesses to lower their computing expenses.
  • Scalability: Spot Instance enables businesses to expand their computing resources when required. As businesses can bid on unused EC2 instances, they can leverage more resources when the demand is high.
  • Flexibility: This service of AWS allows businesses to use AWS resources for brief periods. Therefore, businesses can utilize the resources they need when they need them, without committing to long-term agreements.
  • Availability: Amazon EC2 Spot instances allows businesses to use AWS resources that may not be accessible with on-demand pricing. As businesses can bid on unused EC2 instances, they can access resources that may not be available with standard pricing.

Go through this blog on AWS Interview Question to crack the next job interview!

Career Transition

Use Cases of AWS Spot Instances

AWS Spot Instances is suitable for various use cases, including:

Use Cases of AWS Spot Instances
  • Big Data Processing: Spot instances for big data processing necessitates large computing power for brief periods. Businesses can bid on inactive EC2 instances to process their data, which may reduce their computing expenses.
  • Web Applications: AWS Spot Instances is compatible with web applications that require flexibility and scalability. Businesses can bid on unused EC2 instances to amplify their computing resources when required, which may improve the efficiency of their web applications.
  • High-Performance Computing: Amazon EC2 Spot instances can be utilized for high-performance computing that demands substantial computing power for short periods. Businesses can bid on inactive EC2 instances to complete their computations, which may reduce their computing expenses.
  • Machine Learning: Machine learning is a computationally intensive task that demands a high degree of flexibility and computational power. Spot instances for machine learning is a perfect for  workloads because it allows businesses to bid on unused EC2 instances to train their models, thereby saving them significant amounts of money on computing costs. 

Spot Instances VS Reserved Instances

Spot instances and Reserved Instances (RIs) are two pricing models to consider for Amazon Web Services (AWS) instances, each providing substantial cost reduction opportunities: spot instances may offer up to 90% discounts quickly but often get interrupted, while Reserved Instances provide 72% lower rates with long commitment periods; ultimately choosing which instance best meets your business requirements and current cloud cost challenges will depend upon which instance is right.

The below table describes the difference between the two in detail:

FeatureSpot InstancesReserved Instances
Pricing modelPrice depends upon current supply and demand in the spot market.Prices are fixed over one or three year commitment periods.
DiscountsUp to 90% less expensive than on-demand instancesPrices up to 72% lower than on-demand instances
Availability of instancesDependence upon availability will differ according to market fluctuations and needs.With capacity set aside for specific periods, our service remains available round-the-clock.
Risk of interruptionAt any point in time, two minutes’ notice could cause proceedings to be suspended without warning.There are no interruption risks involved.
FlexibilityFlexible with no long-term commitment requiredReduced flexibility caused by long-term commitments
Ideal forFlexible, noncritical workloads and fault-tolerant.Predictable and business-critical workloads.

AWS Spot Instance Best Practices

AWS Spot Instances can deliver significant cost benefits, yet to reap maximum effectiveness while taking full advantage of AWS’ flexible infrastructure, applications must be designed with fault-tolerance in mind and designed so as to adapt easily. By adhering to best practices such as these you’ll ensure maximum cost efficiency as you use AWS’ flexible infrastructure.

  • Optimize Workloads: Take Advantage of Spot Instances on AWS to Create Flexible and Fault Tolerant Loads that Can Handle Interruptions: data processing, batch jobs or testing can make use of Spot Instances effectively – while keep in mind they shouldn’t be relied upon for critical applications or time sensitive purposes!
  • Establish Sensible Bid Prices: Bid strategically for Spot Instances by setting reasonable bid prices. Consider historical spot prices and set your bid slightly above their average, in order to increase your odds while enjoying cost-savings opportunities.
  • Maintain and Scale: Keep tabs on spot market prices using AWS tools to understand cost fluctuations and prepare to adjust according to market conditions for optimal spending and performance.
  • Utilize Spot Fleets: Take advantage of Spot Fleets to diversify instance types and availability zones while taking full advantage of spot pricing – the Spot Fleet will automatically request capacity from cost-efficient instance pools to ensure high availability at reduced rates.
  • Combine with On-Demand Instances: For optimal cost savings, stability, and performance on various workloads use a hybrid approach by combining Spot Instances with On-Demand and Reserved Instances in combination. This provides the optimal mix between cost reduction, stability and performance based on workload demands.


AWS Spot Instances is undoubtedly a brilliant solution! It offers so many amazing advantages, like being super cost-effective, scalable, and flexible. And get this – the cloud computing sector is expected to see a huge surge in the adoption of AWS Spot Instances! As more and more businesses look to optimize their computing expenses, the demand for spot instances is only going to increase. It’s like a win-win situation – you get all the computing power you need at a fraction of the cost, and AWS gets to show off its amazing technology. 

Visit our AWS Community for additional information if you’re still unsure about AWS.

Course Schedule

Name Date Details
AWS Certification 30 Sep 2023(Sat-Sun) Weekend Batch
View Details
AWS Certification 07 Oct 2023(Sat-Sun) Weekend Batch
View Details
AWS Certification 14 Oct 2023(Sat-Sun) Weekend Batch
View Details

Leave a Reply

Your email address will not be published. Required fields are marked *

Speak to our course Advisor Now !

Related Articles

Associated Courses

Subscribe to our newsletter

Signup for our weekly newsletter to get the latest news, updates and amazing offers delivered directly in your inbox.