Different between Utilizations for Amazon EC2
amazon-ec2
Solution
Apologies for my previous comment, which does seem argumentative now I read it again. Hopefully this answer will make up for it.
With the 3 different packages for reserved instances, Amazon is giving you a tradeoff between what you pay up front for the reserved instance and how much you pay per instance hour for running instances. The up front cost is lowest for Light Utilization instances and lowest for Heavy Utilization instances, but it's the other way around for the hourly cost; that is lowest for Heavy Utilization and highest for Light Utilization.
Let's do some math to illustrate, using a Small Linux instance with a one year reservation term. Here are the relative prices:
Up front payment: $69 for Light, $195 for Heavy
Hourly cost: $0.039c for Light, $0.016c for Heavy
Let's say you run your instances for only 1 hour per day, or 365 hours during the 1 year reservation period. Your total cost would be:
Light: $69.00 + (365 * $0.039) = $83.24
Heavy: $195.00 + (365 * $0.016) = $200.84
But when we run the instances for 20 hours a day or 7300 hours overall, we get:
Light: $69.00 + (7300 * $0.039) = $353.70
Heavy: $195.00 + (7300 * $0.016) = $311.80
So if you predict your workload carefully, you can make some significant savings by choosing the right pricing scheme.
Problem
Based upon this: Reserved Instances can be purchased for 1 or 3 year terms, and the one-time fee per instance is non-refundable. Light and Medium Utilization Reserved Instances also are billed by the instance-hour for the time that instances are in a running state; if you do not run the instance in an hour, there is zero usage charge. Partial instance-hours consumed are billed as full hours. Heavy Utilization Reserved Instances are billed for every hour during the entire Reserved Instance term (which means you’re charged the hourly fee regardless of whether any usage has occurred during an hour). Why would I ever buy the heavy utilization package when I could use the light package and save money whenever the server is'nt being used??