Amazon's dedicated offerings in EC2 come in two flavors: Dedicated Instances and Dedicated Hosts. While both ensure your workloads run on isolated hardware, their implementation differs significantly in terms of visibility, control, and compliance capabilities.

The key distinction lies in the level of hardware abstraction:

• Dedicated Instances: Run on hardware dedicated to your account, but AWS manages the physical server allocation behind the scenes. You get no visibility into the actual host machine.
• Dedicated Hosts: Provide direct access to a specific physical server with socket/core visibility, enabling BYOL (Bring Your Own License) scenarios and strict compliance requirements.

Here's how you'd launch each type programmatically:

# Launching a Dedicated Instance (AWS CLI)
aws ec2 run-instances \
    --instance-type m5.large \
    --placement Tenancy=dedicated \
    --image-id ami-0abcdef1234567890

# Allocating and using a Dedicated Host (AWS SDK for Python)
import boto3

ec2 = boto3.client('ec2')

# Allocate host
host = ec2.allocate_hosts(
    AvailabilityZone='us-east-1a',
    InstanceType='m5.large',
    Quantity=1
)

# Launch instance on host
response = ec2.run_instances(
    InstanceType='m5.large',
    ImageId='ami-0abcdef1234567890',
    Placement={
        'HostId': host['HostIds'][0],
        'Tenancy': 'host'
    }
)

Dedicated Hosts shine when you need:

• Microsoft SQL Server or Windows Server BYOL licensing
• Socket/core-based software licensing models
• Regulatory requirements specifying physical server isolation

While Dedicated Instances offer simpler billing (per-instance), Dedicated Hosts provide:

• Per-host billing regardless of instance usage
• Capacity reservation guarantees
• Better cost optimization for sustained workloads

Dedicated Hosts expose additional metrics:

# Get host metrics via CloudWatch
aws cloudwatch get-metric-statistics \
    --namespace AWS/EC2 \
    --metric-name AvailableHostCapacity \
    --dimensions Name=HostId,Value=h-1234567890abcdef0 \
    --statistics Average \
    --period 3600 \
    --start-time 2023-01-01T00:00:00Z \
    --end-time 2023-01-01T23:59:59Z

Use Dedicated Instances when:

• You need basic hardware isolation
• Your compliance needs don't require host-level visibility
• You want simpler billing without capacity planning

Use Dedicated Hosts when:

• You have software bound to physical hardware
• You need to meet strict regulatory requirements
• You want to optimize costs for predictable workloads

At the hardware level, both options provide isolation from other AWS customers, but with critical architectural differences:

• Dedicated Instance: Runs on single-tenant hardware, but AWS dynamically manages the underlying physical server. Your instances may migrate between hosts during maintenance or scaling events.
• Dedicated Host: Provides a fixed physical server with socket/core visibility. You get direct control over CPU pinning and NUMA topology.

Consider a financial application requiring PCI DSS compliance:

// Bad practice for compliance (dedicated instance)
const ec2 = new AWS.EC2();
ec2.runInstances({
  InstanceType: 'm5.2xlarge',
  Placement: {
    Tenancy: 'dedicated' // Lacks physical host persistence
  }
});

// Compliant deployment (dedicated host)
const params = {
  InstanceType: 'm5.2xlarge',
  HostId: 'h-1234567890abcdef0', // Explicit physical host
  Tenancy: 'host'
};
ec2.runInstances(params);

Dedicated Hosts enable advanced scenarios:

• Bring-your-own-license (BYOL) for Windows Server/SQL Server
• Predictable performance via CPU affinity
• NUMA-aware application tuning

Use Dedicated Host when:
- Regulatory requirements mandate physical server isolation
- You need to meet Microsoft licensing terms
- Applications require low-level hardware tuning

Use Dedicated Instance when:
- You only need hardware isolation
- Flexibility in instance placement is acceptable
- No specific compliance requirements exist

# Dedicated Host provisioning
resource "aws_ec2_host" "pci_host" {
  instance_type     = "m5.2xlarge"
  availability_zone = "us-west-2a"
  host_recovery     = "on"
  auto_placement    = "off"
}

# Instance deployment on specific host
resource "aws_instance" "db_server" {
  ami           = "ami-0c55b159cbfafe1f0"
  instance_type = "m5.2xlarge"
  host_id       = aws_ec2_host.pci_host.id
  tenancy       = "host"
}