In the context of cloud computing, an instance refers to a virtual server. Cloud providers, like AWS or Google Cloud, allow you to create, configure, and customize instances to suit your computing needs.

• Instances can be created and destroyed on demand, providing flexibility and scalability.
• They can be configured with varying amounts of CPU, memory, storage, and network capacity.
• Instances can be used for a variety of tasks, from hosting websites to processing large amounts of data.

An instance works by emulating computer hardware. When you create an instance, you choose the hardware of the host computer where your instance will run. You can select an instance type based on the amount of memory, CPU, and storage that you need for your application.

• Each instance type offers different compute, memory, and storage capabilities and are grouped in instance families based on these capabilities.
• You can change the instance type after you've launched an instance, allowing you to scale your resources to match your application's needs.
• Instances can be launched from a template that includes a preconfigured software stack, or they can be customized after launch.

Consider a web application that experiences varying levels of traffic throughout the day. During peak hours, the application needs more resources to handle the increased load.

• The company can use cloud instances to automatically scale up resources during peak hours and scale down during off-peak hours.
• This ensures that the application always has the resources it needs, while also minimizing costs by not paying for unnecessary resources during off-peak hours.