AWS provides different types of EC2 instances depending on the resources they consume. The naming convention for instance types is based on the number of CPU cores, memory size, disk size, and so on. Depending on these parameters, instances can be named nano, micro, small, medium, large, xlarge, 2xlarge, and so on.

These instance types are classified into five categories: General Purpose, Compute Optimized, Memory Optimized, Storage Optimized, and Accelerated Computing.

The General Purpose category of instance is suitable for hosting websites, creating development environments or build servers, source code repositories, and so on.  

The Compute Optimized category of instances can be used for CPU intensive tasks and applications such as high processing web servers, scientific modeling systems, data analytics, deduplication servers, and so on.

The Memory Optimized category is suited for memory intensive applications. For example, an instance of this category can be used to host a SAP HANA database, which is an in-memory database.

The Storage Optimized instances are well suited for file system specific operations that involve a lot of reads and writes to the storage disk. For example, Hadoop servers or Map Reduce servers can be installed on such instances.