AWS's virtual machine service. It provides scalable compute capacity in the cloud. The customer selects the instance type, OS, and network configuration. IaaS model.
The flagship example of IaaS on CLF-C02. SAA-C03 goes deeper into instance types, pricing options (On-Demand, Reserved, Spot), and Auto Scaling groups. Question: cheapest option for unpredictable workloads → On-Demand. For sustained workloads → Reserved.
EC2 (Elastic Compute Cloud) is a concept that can show up on the exam. Check the full guide to see it in context.