Amazon’s Elastic Compute Cloud (EC2) forms the basis for many Amazon Web Services (AWS) as well as the initial offerings that created modern cloud computing. Amazon EC2 has exploded from two options in 2006 into a matrix of offerings based on the CPUs needed, system memory, operating systems, and associated hardware for storage and networking.
Amazon EC2 instances can be turned off or on as needed, which embodies the elastic nature implied by the name. In developing cloud computing, Amazon enables organizations to stop investing in hardware and pay only for the computing time they need on an hourly or even a minute-by-minute basis.
Amazon EC2 and the Cloud Computing Market
Amazon’s EC2 competes in the cloud computing market that Allied Market Research estimated to be $325 billion in 2019 with projections to grow with a compound annual growth rate (CAGR) of 15.8% to reach $1.6 trillion in 2030.
In 2021, Grand View Research projected the market had reached $369 billion and was growing with a CAGR of 15.7% while Markets and Markets forecasted an even larger $445.3 billion market size that would grow with a CAGR of 16.3% to reach $947 billion by 2026.
In the first quarter of 2022, Amazon held a 33% market share of the high-growth cloud infrastructure market and grew 36.5% compared to the previous year. The major competitors in the cloud computing market include:
- Alibaba Group
- Cisco Systems
- Dell Technologies
- Hewlett Packard Enterprise Development (HPE)
- Rackspace Hosting
Amazon EC2 Key Features
- Global Infrastructure
- 26 launched regions
- 84 availability zones
- Highly precise Amazon Time Sync Service
- Choice of operating systems and software
- Apple macOS
- Linux distributions, including Amazon Linux 2, Ubuntu, Red Hat Enterprise Linux, CentOS, SUSE, and Debian
- Microsoft Windows
- Pay only for used services
- Seamless scaling
- Optimized computing performance
- Optimized CPU configurations
- Pause and resume instances
- Storage optimized for workloads
- Elastic Block Store: Persistent, highly available, consistent, low-latency block storage
- Elastic File System: Simple, scalable, persistent, fully managed cloud file storage for shared access
- Advanced Networking
- High packet-per-second performance networking with low jitter and low latency
- Elastic fabric adapter for high levels of inter-instance communication
- Dynamic cloud computing with elastic IP addresses
- High-performance computing clusters
Amazon EC2 Key Benefits
Organizations that use Amazon EC2 or other cloud computing solutions seek the following key benefits:
Application developers need to test applications on the operating systems (OSs) and hardware on which the applications will run. However, purchasing a wide variety of OS and hardware combinations can be burdensome, and purchasing the hardware necessary to test applications at scale is even more so.
Developers can purchase relevant computing instances on Amazon EC2 using Windows, Linux, and macOS software to develop, troubleshoot, and stress test applications for local machines, enterprise scale use cases, and cloud-native deployment.
Elastic Computing Resources
Most businesses experience variable business cycles that cause surges and drawbacks for computing needs. Elastic computing resources provided by the cloud solutions allow for businesses to deploy a scalable infrastructure that grows and shrinks with true needs.
Using a service like Amazon EC2 avoids committing capital expenses (CapEx) resources unnecessarily to high-performance computing resources that will not be in continual use. Companies can use operational expenses (OpEx) to meet peak demand and free up capital for other uses during downtime.
Machine Learning Infrastructure
Developing artificial intelligence (AI) or machine learning (ML) requires heavy computing power to process enormous datasets and complex mathematical algorithms. Developers can use Amazon EC2 or other cloud resources to obtain computing at scale to train and deploy machine learning applications quickly and inexpensively.
Outsourced Computing Maintenance
In addition to obtaining high performance computing applications at scale, moving to the cloud eliminates many of the operational burdens and expenses necessary for maintaining on-premises data centers.
Companies effectively outsource the costs and management headaches for physical buildings, cooling systems, physical security systems, electrical power, and IT employee time to install, update, maintain, troubleshoot, and retire the bare-metal IT infrastructure.
Amazon EC2 Use Cases
Expedia Worldwide Engineering (EWE) supports all Expedia Group websites worldwide, but it found that its new offerings suffered performance issues when run from centralized data centers in Arizona. EWE needed to deploy resources closer to its customers and selected Amazon EC2 because of its worldwide presence and established strength in the Asia Pacific region.
“From an architectural perspective, infrastructure, automation, and proximity to the customer were key factors,” explained Murari Gopalan, technology director for EWE. “There was no way for us to solve the problem without AWS.”
Lyft provides transportation solutions to riders through a network of 315,000 active drivers in 190 U.S. cities. Lyft’s engineers needed to reduce costs without impairing capabilities and chose to take advantage of AWS Spot pricing.
“By using AWS Spot instances, we’ve been able to save up to 75% a month simply by changing four lines of code. It makes perfect sense for saving money when you’re running continuous integration workloads or pipeline processing,” proclaimed Matthew Leventi, lead engineer at Lyft.
Volkswagen Group Research
Car design requires compute-heavy simulations to test aerodynamics and other performance metrics making various changes during vehicle development. Volkswagen Group Research wanted to decrease the development time for vehicles by using Amazon EC2 to increase the number of simulations and enable machine learning.
“We were able to run 200 car shape variants in a time frame that would normally correspond to only a few runs with our current operational tools,” said Henry Bensler, head of CAE Methods at Volkswagen Group Research. “The hardware and software combination we explored … is, in our opinion, ideal for generating training datasets for machine learning methods, like reduced order modeling.”
Zendesk’s customer-support platform software-as-a-service (SaaS) customers wanted to bypass customer support agents to obtain self-service answers. The data scientists of Zendesk selected Amazon EC2 to deploy systems that could support deep-learning algorithms for its Answer Bot virtual customer assistant.
“AWS enables us to develop and deliver capabilities our customers didn’t have before,” explained Soon-Ee Cheah, a data scientist at Zendesk. “With Answer Bot, for example, our customers can automatically provide more targeted and accurate answers to their customers’ questions.
“And because Answer Bot can reply directly to customers with answers in a few seconds, it can resolve support tickets before they reach agents. That can really transform the customer-service experience.”
Amazon EC2 Differentiators
When choosing Amazon EC2 over other cloud computing resources, customers often do so because of the following key differentiators:
Amazon’s prominence in the marketplace creates a heavy demand for software and services to support its offerings. The AWS Marketplace provides over 10,000 offerings to support AWS products such as data products, DevOps, business applications, infrastructure software, Internet of Things (IoT), machine learning, professional services, and offerings tailored for specific industries like education and healthcare.
Brand and Market Leader
Amazon Web Services ranks No. 1 in market share and has a lead in offering support services and options. As the pioneering developer for cloud computing, AWS continues to expand its offerings and the features associated with EC2 and other cloud-computing offerings.
Amazon customers also benefit from the well-established AWS ecosystem and the fact that almost every cloud application must factor AWS compatibility into its development. Amazon also offers data centers world-wide with a well-established record of high reliability and resilience.
macOS Application Development
In November 2020, Amazon EC2 announced the availability of macOS instances from macOS Mojave (version 10.14) to macOS Monterey (version 12). EC2 also offers x86-based Mac hardware with Intel Core i7 processors, which allows Mac application developers to perform real-world tests on a variety of combinations to test future releases for iPhone, iPad, Mac, Apple Watch, Safari, or Apple TV.
User Reviews of Amazon EC2
|Gartner Peer Insights||4.7 out of 5|
|TrustRadius||9.0 out of 10|
|G2||4.6 out of 5|
|Capterra||4.6 out of 5|
|PeerSpot||4.4 out of 5|
Amazon EC2 Pricing
The flexible pricing for Amazon EC2 creates a complex and somewhat confusing array of options that may be best priced using the AWS pricing calculator. Amazon EC2 offers a free tier, short term free trials, and even up to 12 months of free service.
Amazon EC2 is also offered in five paid tiers:
- Free Tier: 750 hours of Linux and Windows t2.micro instances each month
- On-Demand: Payable by the hour or the second, no term or upfront payments, and increase or decrease as needed
- Savings Plans: Discounted hourly rates in exchange for a consistent amount of usage and offered in one- and three-year terms
- Reserved Instances: Scheduled and reserved computing power offered at a discount of up to 72% from On-Demand pricing
- Spot Instances: Spare EC2 computing capacity for up to 90% off on-demand pricing
- Dedicated hosts: Physical EC2 server dedicated for use on an hourly basis and customers can use their own software licenses
In the buying or pricing process, customers will need to select from the following options:
- Tier of pricing
- Region for hosting
- Operating system for the instance
- Instance type
- General Purpose
- Compute Optimized
- Memory Optimized
- Accelerated Computing
- Storage Optimized
5. Number of CPUs for the instance
Cloud computing offers many advantages for enterprises to lower costs, free up cash flow, and improve operational resilience for peak demand times. Cloud computing also enables the development or deployment of applications that require raw bursts of computing power such as artificial intelligence and simulations.
Customers considering any move to the cloud must include Amazon EC2 and AWS in their evaluation list. As the original developer of cloud computing, Amazon provides a well-developed and robust solution to satisfy a huge variety of needs.