EC2 On-Demand/Reserved Pricing History

Amazon EC2 instance prices are not fixed, in a way that Amazon has the ability to change these prices at any given moment in time. It should not come as a surprise that prices have decreased over the last couple of years. This is a rather natural phenomenon ... since the instances that existed back then do still have the same specifications, but their hardware cost have decreased dramatically. So, Amazon is able to keep being competitive by lowering its prices. When making a division between the different instance types, this possibility should be taken into account. If one should pay the reserved instance rate for the rest of the period the instance was rented, the price change that is predicted could be taken into account as a discount on the on-demand prices. To be able to make such conclusions one should have a look at the price decreases that happened in the past, so I'll give a little history overview of the EC2 instances and their pricing.

The history of EC2 and its instances is given in a chronological order, when prices did change they will be presented as well:

• [24/08/2006] Amazon Elastic Compute Cloud beta is announced. There was only one instance type (1.7GHz Xeon processor/1.74 GB of RAM) available for $0.10 per hour.
  
  
• [22/10/2007] EC2 in unlimited beta and new instance types are announced.
  
  
• [29/05/2008] High-CPU instances announced.
  
  
• [23/10/2008] EC2 exits beta and offers SLA with commitment of 99.95% availability within a region.
• [23/10/2008] EC2 instances running Windows Server available.
  
  
• [10/12/2008] the European Region is added.
• [08/01/2009] the AWS management console is launched.
• [03/03/2009] Windows instances announced for the EU region.
• [12/03/2009] EC2 introduces Reserved instances
  
  
• [15/04/2009] Reserved instances now available in Europe.
• [20/08/2009] prices of Reserved instances are decreased.
  
  
• [30/09/2009] distinction between instances running Windows and instances running Windows with Authentication Services is removed (the price of the general Windows instances is put in place).
• [27/10/2009] new High-Memory instances announced.
  
  
• [27/10/2009] all other on-demand prices are lowered with up to 15%
  
  
• [03/12/2009] Northern California region launched.
• [14/12/2009] Amazon EC2 Spot instances announced.
• [23/02/2010] Extra Large High Memory instances get introduced.
  
  
• [23/02/2010] EC2 instances with Windows now available.
  
  
• [29/04/2010] Asia Pacific (Singapore) Region announced
• [13/07/2010] Cluster Compute instances announced.
  
  
• [01/09/2010] Lower prices for High Memory Double and Quadruple XL instances.
  
  
• [09/09/2010] Micro instances are announced.
  
  
• [21/10/2010] AWS Free Usage Tier introduced.
• [15/11/2010] Cluster GPU instances announced.
  
  
• [03/12/2010] Free monitoring of CPU, disk and network performance metrics through CloudWatch is introduced.

Your hourly rate for reserved instances is changed as well when prices are changed, which can be seen in the official press release of the price reduction that happened in september.

Effective September 1, 2010, we've reduced the On-Demand and Reserved Instance prices on the m2.2xlarge (High-Memory Double Extra Large) and the m2.4xlarge (High-Memory Quadruple Extra Large) by up to 19% and the Reserved Instances by up to 17%. If you have existing Reserved Instances your hourly usage rate will automatically be lowered to the new usage rate and your estimated bill will reflect these changes later this month.

You however still paid the full one-time fee, so these possible changes could still be taken into account. We notice however that not that many price reductions have happened in the EC2 history. Most of the new prices were made when a new instance type was introduced. The only real general price reduction happened in October 2009, when all on-demand prices were lowered up to 15%. But prices will probably have to change more often in the future since market pressure will rise.