Description: A placement group in Amazon EC2 (Elastic Compute Cloud) refers to a logical grouping of instances within a single Availability Zone. This concept is fundamental for resource management in the cloud, as it allows users to organize and manage their instances more efficiently. Instances within a placement group can communicate with each other with low latency and high bandwidth capacity, which is crucial for applications requiring optimal performance. Additionally, placement groups are particularly useful for applications that need high network performance, such as distributed databases or compute-intensive applications. When creating a placement group, users can specify the type of grouping they want, either a ‘cluster’ grouping, which clusters instances in the same physical location, or a ‘spread’ grouping, which distributes instances across different hardware to minimize the risk of failures. This flexibility allows developers and system architects to optimize their cloud application infrastructure, ensuring that performance and availability requirements are met.