Amazon Elastic Compute Cloud (EC2) provides three different pricing models for its compute capacity: Spot Instances, On-demand Instances, and Reserved Instances. Each of these pricing models has its own advantages and disadvantages, and users can choose the model that best fits their needs.

Spot Instances are instances that are available at a discounted price compared to On-demand Instances. Spot Instances allow users to bid on unused EC2 capacity and can be ideal for applications that are flexible in terms of when they can run. However, Spot Instances can be interrupted with two minutes’ notice if the capacity they are running on is needed by other users, which makes them unsuitable for applications that require guaranteed availability.

On-demand Instances are instances that can be launched and terminated at any time and are charged by the hour or by the second depending on the instance type. On-demand instances are ideal for applications that require guaranteed capacity and do not have a predictable usage pattern.

Reserved Instances are instances that are purchased for a one-time, upfront fee, and provide a discounted hourly rate for the instance. Reserved Instances are ideal for applications that have a predictable usage pattern, as they can provide significant cost savings over On-demand Instances in the long run. Reserved Instances can be purchased for a term of one or three years, and offer different pricing options, such as No Upfront, Partial Upfront, and All Upfront.