With AWS, many different pricing models are available that allow you to pay for resources in the most cost-effective ways possible while ensuring your business needs are met. In many cases, you may get exactly the same server, but its pricing will vary according to the different commitment levels, either from you or AWS.
Spot instances and reserved instances (RIs) are two types of EC2 pricing models that can be considered. While spot instances can offer up to 90% discount but quickly get interrupted, reserved instances offer up to 72% decreased rates and high availability, but with long commitment periods. The right instance will depend on your business requirements and current cloud cost challenges.
In this article, we look at spot instances vs. reserved instances and compare the two.
What Are Spot Instances?
Spot instances involve bidding on excess or unused capacity available with AWS and paying only for the time you use it. While spot instance prices fluctuate based on the supply and demand of the current market, the prices are usually lesser than on-demand and reserved instances. With spot instances, you can get up to 90% off with no required long-term commitment.
However, there is a catch that you need to be careful about: AWS can terminate spot instances at any time and with a short termination notice. This happens when the capacity demand increases or your bid for the spot instance gets outbid.
When AWS wants to reclaim a spot instance, it will send a two-minute warning through CloudWatch Events and instance metadata. You can use these two minutes to save the application state, upload log files, or drain any presently running containers.
Spot instances are suitable for workloads that are fault-tolerant, non-critical, and flexible since these instances can get interrupted easily without much notice.
Spot instances are ideal for workloads that are flexible, stateless, fault-tolerant, and non-critical, such as batch processing, testing, or development. Overall, it is advisable not to run any kind of business-critical applications on the spot instances.
Source: AWS
Advantages And Disadvantages of Spot Instances
Advantages
- Discounts: Spot instances can cost up to 90% lesser than on-demand instances since they don’t require any kind of big commitment. For developers keen on keeping the cloud costs down, spot instances can be an excellent place to start.
- Flexibility: Once you have bid on a spot instance, you can get it up and running right away. And when you no longer need the spot instance, you can shut them down.
Disadvantages
- Quick terminations with little notice: While no commitment can get you spot instances at a discounted rate, you cannot depend on spot instances for running critical applications. If AWS needs the spot instances back, it only gives a few minutes of notice before taking them back.
- No fixed pricing: The pricing for spot instances can vary based on their demand, so it might be challenging to predict how much you will have to pay for spot instances. While going behind discounted rates, you may end up paying even more.
What Are Reserved Instances?
Reserved instances allow you to reserve a specific amount of computing capacity for a fixed time period, which is usually one or three years. Since you commit to a long-time contract, you can get up to 72% discount on monthly or hourly rates, as compared to on-demand instances.
When reserved instances get assigned to a particular availability zone, they reserve the capacity for that zone only. Reserving the capacity means you can launch the instances whenever required.
If you are committing to a reserved instance for one or three years, make sure that you will be utilizing its complete capacity for the entire period of time to optimize cloud costs.
Reserved instances are more suitable for workloads with a steady and predictable demand, like databases and web servers.
Source: AWS
There are two types of reserved instances available:
Standard RIs: They are usually used in workloads that have little to no variation in performance over the period of several months or years. With standard RIs, you can modify the scope, availability zone, instance size, and networking type of the reserved instances. You can also sell them on the Reserved Instance Marketplace.
Convertible RIs: They are used for workloads that require flexibility in terms of changing operating systems or instance families. Note that you cannot sell them in the Reserved Instance Marketplace.
Advantages And Disadvantages of Reserved Instances
Advantages
- Heavy discounts: Reserved instances charge 72% less than on-demand instances.
- No surprises with costs: The prices of reserved instances don’t suddenly change during the one or three-year commitment period. You will always know exactly what you will be charged and won’t have to deal with any sudden cost fluctuations.
Disadvantages
- More commitment with less flexibility: Once you have committed to reserved instances, you will continue paying for them for the entirety of the period, whether you use those instances or not.
- Fixed prices could lead to lesser savings: While fixed prices of reserved instances can save you from sudden fluctuations, it can also lead to you missing out on savings.
Spot Instances Vs Reserved Instances: The Primary Differences!
| Feature | Spot Instances | Reserved Instances |
| Pricing model | Prices vary based on the current supply and demand of the spot market | Prices are fixed for one-year or three-year commitment |
| Discounts | Prices are up to 90% lesser than on-demand instances | Prices up to 72% lesser than on-demand instances |
| Availability of instances | Availability varies and depends on the spot market | Available all the time since the capacity is reserved for the specific period of time |
| Risk of interruption | Instances can get interrupted with just two minutes of notice | There is no interruption risks |
| Flexibility | Highly flexible with no long-term commitment | Decreased flexibility due to commitments for one or three years |
| Ideal for | Flexible, fault-tolerant and noncritical workloads | Predicticable and business-critical workloads |
How Can nOps Karpenter Solution (nKS) Help You Save?
With nOps Karpenter Solution (nKS), it is possible to automatically optimize your AWS environment for spot instances and reserved instances, significantly reducing your cloud spending. nKS reconsiders prices in real-time to maximize cloud savings.
Here are some of the significant features of nKS:
- 60-minute advance spot prediction for spot instances as opposed to the two-minute notification from AWS, to handle spot termination interruptions before they happen
- Automatically schedule EKS resources according to the available RIs, spot instances, and Saving Plans
- Leverage AWS’s open-sourced platform, Karpenter, to help autoscale
- User-friendly interface for easy configuration and management
Ready to save more? Explore more about nOps Karpenter Solution (nKS) here!
