When you are setting up an environment on AWS cloud, you need to go through many steps, like creation of IAM roles, Security groups, Databases, EC2 instances, load balancers etc. Often one resource is dependent on other and hence you have to create components one by one which can be time consuming. With Cloudformation scripts one can easily get the deployment steps automated. And most importantly, the script is reusable any number of times. So if I want to replicate a stage setup on production or another setup in another region, it is easily possible.

One can create template in JSON or YML formats. The template is submitted to cloud formation which executes the template and create the stack which is actual environment with all the mentioned components.

Another important thing is that you can not only create infrastructure, but also do required settings. For example, I needed to get setup for application done on EC2, which I was easily able to do with UserData section.

Here is an example

Resources: 
    AppNode1: 
        Type: AWS::EC2::Instance
        Properties:
            InstanceType: XXXXX # type here
            ImageId: ami-XXXX # any ami here
            KeyName: XXXX # name of the key if already exising or create a new one
            IamInstanceProfile: !Ref InstanceProfile
            NetworkInterfaces:
            - AssociatePublicIpAddress: true
              DeleteOnTermination: true
              Description: ENI for bastion host
              DeviceIndex: '0'
              SubnetId: subnet-XXXXX
              GroupSet:
              - !Ref AppNodeSG
            UserData:  
              "Fn::Base64":
                "Fn::Sub": |
                  #!/bin/bash
                  cd /root/
                  apt-get update
                  apt-get -y install awscli
                  aws s3 cp s3://XXXX/XXXX.XXX ~/some location
                  #One can install servers, download wars and deploy at runtime
    AppNode2: 
        Type: AWS::EC2::Instance
        Properties:
            # create another instance
    AppNodeSG: 
        # Security group to give access to ssh and port 80
        Type: AWS::EC2::SecurityGroup
        Properties: 
            GroupDescription: SecurityGroup for new AppNode
            VpcId: vpc-XXXXX
            SecurityGroupIngress:
            - IpProtocol: tcp
              FromPort: 80
              ToPort: 80
              CidrIp: 0.0.0.0/0
            - IpProtocol: tcp
              FromPort: 22
              ToPort: 22
              CidrIp: 0.0.0.0/0
    InstanceProfile:
        Type: AWS::IAM::InstanceProfile
        Properties: 
            Path: /
            Roles: [S3FullAccess] # S3FullAccess Role created Manually, so that my EC2 instance can access S3.