Adding design doc

designs/dedicatedhosts.md

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+# Dedicated host support
+## Background
+
+As described in [3182](https://github.com/aws/karpenter/issues/3182) AWS provides the 
+ability to launch EC2 instances on [Dedicated Host hardware](https://docs.aws.amazon.com/license-manager/latest/userguide/host-resource-groups.html)
+Dedicated hosts are often used to pay for ec2 usage as capital expenditure (CapEx)
+rather than an operating expense (OpEx). This is often useful for publicly listed
+companies that want to manage their revenue to OpEx ratio.
+
+AWS allows the allocation of ec2 instances to Dedidcated Host Host Resource Groups (HRG)
+through the use of launchtemplates. 
+Detailed documentation for launchtemplates and host resource groups can be found here:
+- https://docs.aws.amazon.com/autoscaling/ec2/userguide/create-launch-template.html#advanced-settings-for-your-launch-template
+- https://docs.aws.amazon.com/license-manager/latest/userguide/host-resource-groups.html
+
+## Solutions
+
+aws-karpenter already supports a set of [LaunchTemplate configuration](https://github.com/aws/karpenter/blob/main/pkg/apis/v1alpha1/awsnodetemplate.go)
+with design document: https://github.com/aws/karpenter/blob/main/designs/aws-launch-templates-v2.md
+
+1. Implement the minimal fields from https://docs.aws.amazon.com/AWSCloudFormation/latest/UserGuide/aws-properties-ec2-launchtemplate-launchtemplatedata-placement.html
+specifically `placement.hostResourceGroupArn` and `licenseConfiguration`
+
+this would look like:
+
+```
+apiVersion: karpenter.k8s.aws/v1alpha1
+kind: AWSNodeTemplate
+metadata:
+  name: default
+spec:
+  licenseConfiguration: arn:aws:license-manager:eu-east-1:123456789012:license-configuration:lic-edf7f9e241f5e16f29996c842111f448 # optional, arn of the license configuration
+  placement:
+    hostResourceGroupArn: arn:aws:resource-groups:us-east-1:123456789012:group/my-hrg-name #optional, The ARN of the host resource group in which to launch the instances. If you specify a host resource group ARN, omit the Tenancy parameter or set it to host.
+  
+```
+
+2. Implement the complete fields from AWS Launch Templates
+
+eg.
+```
+apiVersion: karpenter.k8s.aws/v1alpha1
+kind: AWSNodeTemplate
+metadata:
+  name: default
+spec:
+  licenseConfiguration: arn:aws:license-manager:eu-east-1:123456789012:license-configuration:lic-edf7f9e241f5e16f29996c842111f448 # optional, arn of the license configuration
+  placement:
+    affinity: #optional
+    availabilityZone: #optional
+    groupId: #optional, something to do with placement groups
+    groupName: #optional
+    hostId: #optional, ID of the dedicated host
+    hostResourceGroupArn: arn:aws:resource-groups:us-east-1:123456789012:group/my-hrg-name #optional, The ARN of the host resource group in which to launch the instances. If you specify a host resource group ARN, omit the Tenancy parameter or set it to host.
+    paritionNumber: #optional, The number of the partition the instance should launch in. Valid only if the placement group strategy is set to partition.
+    spreadDomain: #optional, reserved for future use
+    tenancy: dedicated #optional, The tenancy of the instance. An instance with a tenancy of dedicated runs on single-tenant hardware, one of dedicated | default | host
+
+```
+
+3. Implement a simplified API
+AWS Launch templates also include extra fields
+
+```
+apiVersion: karpenter.k8s.aws/v1alpha1
+kind: AWSNodeTemplate
+metadata:
+  name: default
+spec:
+  dedicatedHostConfig:
+    licenseConfiguration: arn:aws:license-manager:eu-east-1:123456789012:license-configuration:lic-edf7f9e241f5e16f29996c842111f448 # optional, arn of the license configuration
+    resourceHostGroup: arn:aws:resource-groups:us-east-1:123456789012:group/my-hrg-name #option, arn of the HRG 
+```
+
+4. Implement Selectors for all relevant fields
+
+```
+apiVersion: karpenter.k8s.aws/v1alpha1
+kind: AWSNodeTemplate
+metadata:
+  name: default
+spec:
+  licenseSelector:
+    name: "myLicense"
+  hostResourceGroupSelector:
+    name: "myHrg"
+```
+
+This would require inexpensive or filterable APIs to query for available license configurations and host resource groups.
+Today the recommended apis are:
+* `aws license-manager list-license-configurations`
+* `aws resource-groups list-groups`
+* `aws ec2 describe-placement-groups`
+
+
+## Recommendations
+
+1. Middle ground solution, stick both to the AWS Launch Template api, but implementing the smallest set of configuration practical, 
+limits the amount of checks required to be performed in Karpenter, eg. setting both hostId and HostResourceGroupArn
+
+2. Completely copies the AWS api, would allow the full set of possible configurations supported by AWS. As documented in launch-template-options.md also requires the most work to implement and support.
+
+3. Focuses entirely on the dedicated host feature, ignoring other configuration options. Reduces confusion
+
+## Decision from Working Group meeting
+
+Implement selectors for all relevant fields to improve portability of configuration between clusters / regions / accounts.