There are three types of instances offered by Amazon to serve as servers on the basis of pricing options. These three types include AWS Reserved Instances, Spot Instances and On- Demand Instances. Among all three types, reserved instances are the most cost effective solution specially for large scale organizations. Companies can choose the payments options among partial payment or pay in full while purchasing a reserved instance. A reserved instance can be created while keeping few things in focus. First of all, company has to choose one of the instance type supported by amazon as per its choice. After that, they have to select the Operating System (OS) for that specific instance along with availability zone, tenancy and region specifications. After buying a specific reserved instance and all of its associated resources, the client can still switch to some other reserved instance belonging to same instant family. Availability zones can also be changed but the new zone must lie within the same region.