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When I launch an instance on EC2, it gives me an option for t1.micro, m1.small, m1.large etc. There is a comparison chart of vCPU, ECU, CPU cores, Memory, Instance store. Is this memory RAM of a system?

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I am not able to understand what all these terms refer to, can anyone give me a clear picture of what these terms mean?

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So, EC2 is basically the EC2 Compute Unit. Let us see what that means.

The content below has been taken from this official FAQ of Amazon which provides a clear explanation to this question.

Amazon EC2 uses a variety of measures to provide each instance with a consistent and predictable amount of CPU capacity. In order to make it easy for developers to compare CPU capacity between different instance types, we have defined an Amazon EC2 Compute Unit. The amount of CPU that is allocated to a particular instance is expressed in terms of these EC2 Compute Units. We use several benchmarks and tests to manage the consistency and predictability of the performance from an EC2 Compute Unit. One EC2 Compute Unit provides the equivalent CPU capacity of a 1.0-1.2 GHz 2007 Opteron or 2007 Xeon processor. This is also the equivalent to an early-2006 1.7 GHz Xeon processor referenced in our original documentation. Over time, we may add or substitute measures that go into the definition of an EC2 Compute Unit, if we find metrics that will give you a clearer picture of compute capacity.

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