Explanation

Correct Answers: Reserved Instances and Savings Plans

Why these options are correct:

1. Reserved Instances (RIs):

   • Allow you to make an upfront commitment (1 or 3 years) for EC2 instance usage
   • Provide significant discounts (up to 72%) compared to On-Demand pricing
   • Require commitment to specific instance types, families, and regions
   • Offer the lowest cost for predictable, steady-state workloads

2. Savings Plans:

   • Offer flexible pricing models with 1 or 3-year commitments
   • Provide similar discounts to Reserved Instances (up to 72%)
   • More flexible than RIs - apply to instance usage regardless of instance family, size, OS, tenancy, or region
   • Two types: Compute Savings Plans (most flexible) and EC2 Instance Savings Plans

Why other options are incorrect:

• Spot Instances: Provide the lowest cost (up to 90% discount) but are interruptible and not suitable for production workloads that require reliability. No upfront commitment required.
• On-Demand Instances: Pay-as-you-go with no commitment, but highest cost for long-term usage. No upfront commitment.
• Dedicated Hosts: Physical servers dedicated to your use, but more expensive than RIs/Savings Plans unless you have specific compliance or licensing requirements.

Key Considerations:

• Both Reserved Instances and Savings Plans require upfront commitments (1 or 3 years)
• Savings Plans offer more flexibility than Reserved Instances
• For production workloads requiring reliability, RIs and Savings Plans are preferred over Spot Instances
• The question specifically asks for options with "upfront commitment" and "lowest cost" - RIs and Savings Plans meet both criteria