With On-Demand instances you pay for hours used with no commitment. There are no upfront
costs so you have maximum flexibility
Spot instances are used for getting a very low price which you bid on. You lose some
flexibility as you are constrained by market prices and your workloads can be terminated if
the market price exceeds your bid price
Reserved instances are based on a commitment to 1 or 3 years in exchange for a large
discount
Dedicated hosts use physically dedicated EC2 servers to isolate your workloads and are
expensive