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EC2 Placement Groups are logical groupings or clusters of instances in the selected AWS region. Placement groups are specifically used for launching cluster compute instance types. (e.g. cc2.8xlarge)
Cluster Compute Instances provide a large amount of CPU. For example, the cc2.8xlarge instance type has quad-core processors with hyper-threading enabled (8 physical cores with 16 threads). When these instances are grouped together and launched in the context of an EC2 Placement Group, the instances benefit from a high bandwidth interconnect system, which makes them ideal for applications that require lots of network I/O. (e.g. High Performance Compute (HPC) applications and other demanding network-bound applications)
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