EC2 Tenancy Types in AWS

A quick summary

When we launch an instance in AWS, we essentially rent space in an Amazon warehouse to run our virtual machine. Depending on our needs, we can “rent space” with AWS under three tenancy types.

These tenancy types differ from each other in terms of resource sharing, insights into physical hardware and costs.

Slide cropped from AWS re:Invent 2016: Bring Microsoft Applications to AWS to Stay License Compliant

Tenancy Types

  1. Shared Tenancy
  2. Dedicated Tenancy
  3. Dedicated Host

Shared Tenancy

This is the default mode, unless we select otherwise, all instances are launched under a shared tenancy model.

When an instance is launched, it is fired up inside a large server in an AWS warehouse. This server not only caters to your instance but also to other instances launched by other AWS users. Your instance shares the physical resources of this large server with others AWS accounts.

This is the cheapest option as you only pay for what you use — just like renting a room inside a house, you pay for the room only and share the kitchen, washroom, living room with your roommates.

Dedicated Instance

When an instance is launched under a dedicated instance model, AWS starts your virtual machine inside “single tenant hardware”. This means that all instances launched in this physical server will be from your account only.

This is very valuable when it comes to compliance and regulatory requirements that your business has to adhere too — such as physical isolation of hardware for security, privacy, government regulatory reasons.

This option is slightly more pricey, since a flat fee of $2/hour is charged for each region you fire up your instances in.

Also, on top of the regular EC2 fees, AWS charges 10% more for dedicated instances compared to instances under shared tenancy model.

Dedicated Host

When an instance is launched under a dedicated host model, AWS not only starts this instance inside single tenant hardware, it also also gives the user more insight and visibility into physical aspects of this host server.

Dedicated Host instances are necessary when the user wants to use AWS resources but at the same time bring their own license (BYOL) for OS’ such as Windows Server, RHEL servers, SQL server etc that require more detailed hardware information.

This is the most priciest tenancy model, since you pay for the entire physical host. If the host has a capacity to launch 10 instances, and you have only launched three instances, you still pay for the whole thing.

Hence it is important to launch an appropriate dedicated host that will fulfill your for your business requirements.

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Systems Engineer | AWS Certified Cloud Solutions Architect