This basically lets you have an entire machine dedicated to a specific type of VM instance, plus have the underlying hardware information, to ease licensing req

This basically lets you have an entire machine dedicated to a specific type of VM instance, plus have the underlying hardware information, to ease licensing requirements that certain programs and operating systems have. So you can get a box of m4.larges and know exactly what programs are running on it; for example, RedHat offers per-vm server licensing, so running 20 instances on RHEL on your dedicated box just costs you the flat rate VM host cost.