AWS EC2 provides hosting of virtual servers. Virtual servers are also commonly referred to as virtual machines (VMs).
An instance of a virtual server is started using an Amazon Machine Image (AMI), which is a virtual machine image containing an operating system and applications.
Costs are incurred while the instance is running.
The size of the instance can be configured using predefined instance Types. The instance Type determines the number of virtual CPUs and memory available to the instance.
Disk space is provided by Elastic Block Store (EBS).
Networking is provided by Virtual Private Cloud (VPC).
An instance can have many Security Groups attached. A Security Group defines a whitelist of IPs that can access a port on an instance.