EC2 instances are the most expensive part of a company's AWS bill. So, selecting the right instance type is the key through which you can optimize your bill. The following section is a quick overview of the different instance types. Instance types, both in the cloud and on premises, are defined by four factors:

• Number of cores
• Memory
• Storage (size and type)
• Network performance

To see a quick illustration of how these factors affect each other, visit http://youtube.com/infoobjects.

In the EC2 world, these factors have been modified slightly to vCPU. vCPU is a virtualized unit of:

• Memory  
• Storage (size and type)
• Network performance

Instance type families are defined by the ratio of these factors, especially vCPU to memory. In a given family, this ratio remains unchanged (T2 excluded). Different instance families serve different purposes, almost like different types of automobiles. In fact, we are going to use the automobile metaphor in this section to illustrate these families.