Which EC2 pricing option is the MOST cost-effective for the company’s workload?

Explanations:

On-Demand pricing allows users to pay for compute capacity by the hour or second, depending on which instances they run. While this option offers flexibility and is suitable for variable workloads, it is generally more expensive than other options for long-term use, especially for a workload that needs to remain active for 12 months.

Dedicated Hosts provide physical servers dedicated to a single customer, allowing for greater control over instance placement and licensing. However, this option tends to be the most expensive and is unnecessary for a standard migration workload, making it less cost-effective compared to Reserved Instances for a long-term commitment.

Spot Instances allow users to bid on unused EC2 capacity at potentially lower prices. However, Spot Instances can be terminated by AWS with little notice, making them unsuitable for workloads that must remain active at all times for the next 12 months.

Reserved Instances provide a significant discount (up to 75%) compared to On-Demand pricing in exchange for a one- or three-year commitment. For a workload that must stay active continuously for 12 months, Reserved Instances are the most cost-effective option, as they offer both savings and guaranteed availability.