Amazon Web Services: Reserved Instances DeMystifed


Amazon Web Services offer a credible and cost effective alternative to on premise infrastructure.

This is especially true where demand is spikey or unpredictable. The consumption model is perfect for these scenarios.

However most other cloud providers offer the ability to buy resources as a commitment (or subscription) thus reducing the cost. It’s the cloud bulk buy.

In AWS this is call a Reserved Instance, you can purchase a reserved instance (RI) at a lower cost than the consumption equivalent.


What Savings are Available

You can buy RI’s in 3 ways :-

No Upfront – this means no CapEx but is also the lowest saving. You will pay for the resource hourly but at a lower rate due to the commitment. This will typically save you around 30%

Partial Upfront – this is effectively a compromise there is some CapEx and a substantially lower hourly cost. Again there is a time commitment. Typically this will save 50%

Fully Upfront – all of the cost is payed for upfront with no hourly charges, this represents the largest saving. This will typically give a saving of around 55%.


How Do I Buy RI’s

An RI is a machine instance and is purchased through your normal route.

You buy an RI of the required size and type. The RI will automatically be allocated to a running instance that matches so your savings will be instant.

What can I do with my RI?

Once you have an RI, depending on the type, you can split or combine them to better fit your requirements and maximise the benefit. They can also be moved between Availability Zones.

Linux Split/Combine Move
Redhat Move
Windows Move


Splitting and combination can only be done with instances in the same family, so a T2 instance cannot be combined with a M4 instance.

Each instance type within a family has a points value and you can split an instance in to smaller parts as long as the total point stay the same.

  • WARNING: This takes at least a little planning due to the above. Randomly splitting instances could easily leave you with instances that are two small to be of use.

If you no longer require a RI it can be sold on the RI marketplace. To do this you will need to have a bank account registered as payment is taken in cash (where applicable). Once sold you are no longer responsible for the RI or its associated costs.

Most RI’s are sold at MSRP but the price is determined by the seller. Of course you can also buy an RI this way.


Tagged with: ,

Leave a Reply

Your email address will not be published.