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We need to under the Amazon EC2 life-cycle from the moment Instance is launched till it is terminated with insight understanding of different phase with which the instance will go through such as Restart and Shutdown.

A good understanding of AMI lifecycle helps us to refrain from unwanted billing which will us to make a best customer relationship.

Before we start let us have close look on Instance lifecycle mentioned below which show various stage of Instance Transitions.



To make it easy let us compare the diagram with our On-Prem Server lifecycle. Project or Customer is only charge for the time they are utilizing the resource which is indeed a Storage in most of the case. 

If a Server is Shutdown, Rebooted or Terminated there won’t be any charge (This is a very general we are discussing here).

With few catches AWS even follows the same procedure. Note here we are only discussing about Instance there are some AWS resources such as EBS and Elastic IP whose billing charge are regardless of your Instance’s state.

Now let me define each phase of lifecycle:

Pending: Instance is preparing to start or get in running state (configuration and other required things happens in this state). When a new instance is launched or Restarted after stopping this state of pending occurs (Instance cannot be used). Billed - NO

Running: Instance is Up and Running (ready to use). Billed - YES

Stopping: Instance is preparing to be stopped or stop-hibernated. Billed (Stopped-Not: billed and Stopped-Hibernate: Billed)

Stopped: Instance is not in usable state but can be restarted anytime. Billed - NO


Shutting-down: Instance preparing to shutdown. Billed - NO

Terminated: Instance is permanently delete and cannot be restarted. Billed – NO (Reserved instance are billed until the end of their term)



You may also check my article on "Best practice for InstanceLifecycle".

For more informative please refer Amazon site. Thankful to AWS for graphics.

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With regards,
Sayed

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