Choosing the Right AWS Reserved Instance Types

Choosing the Right AWS Reserved Instance Types

RIs allow customers to purchase compute capacity in advance for a specified period of time at a discounted rate, providing customers with a significant cost savings compared to on-demand pricing. However, choosing the right RI type can be a challenging task, as there are numerous RI types and configurations available.

RIs are ideal if you expect to be using an EC2 instance for a long period of time, of at least one year, as they can give you substantial discounts. You have three payment options with RIs; you can pay all up-front (AURI), pay partially up-front (PURI), or not pay anything up-front (NURI). Generally, the longer you commit up-front, the greater the discount. The NURI option gives the smallest discount but doesn’t require an upfront financial commitment. Nonetheless, it is important to be aware of all the details that come with AWS reserved instance types in order to find the one that best suits your business needs.

In this article, we will explore the different types of AWS RIs, the factors to consider when choosing the right RI type, and how to optimize your RI purchases for maximum cost savings.

What Are AWS Reserved Instances?

RIs are available for Amazon Elastic Compute Cloud (EC2) instances, Amazon Relational Database Service (RDS) instances, and Amazon ElastiCache nodes, as well as for other services such as Amazon Redshift, Amazon ElasticSearch, and Amazon Neptune.

Types of AWS Reserved Instances

AWS offers three RI types: Standard RIs, Convertible RIs, and Scheduled RIs. Each type offers different benefits and features, and customers should choose the type that best meets their needs.

Standard Reserved Instances

Standard RIs are the most basic and straightforward RI type. They are best suited for customers who know their compute needs in advance and plan to use the same compute capacity for the duration of the RI term.

Standard RIs are also the only RI type that can be sold or transferred between accounts.

Convertible Reserved Instances

Convertible RIs are best suited for customers who want the flexibility to change the RI’s configuration. For example, customers can change the instance type, OS type, or tenancy of their Convertible RI.

Convertible RIs provide customers with a smaller discount compared to Standard RIs, but they offer more flexibility in terms of configuration.

Scheduled Reserved Instances

Scheduled RIs are best suited for customers who plan to use a specific instance type at specific times. For example, customers who need to run an application on the same instance type every day between 9am and 5pm can use Scheduled RIs to reserve capacity for this time period.

Scheduled RIs provide customers with a discounted rate compared to on-demand pricing, but they offer less flexibility than Standard and Convertible RIs. Scheduled RIs can only be purchased for a 1-year term, and customers must pay all up front.

Compute needs, time frame, payment options and discount rates are some of the key considerations when deciding which RI to buy. 

How to optimize your AWS RI purchases for maximum cost savings?

Now that we’ve explored the factors to consider when choosing the right RI type, let’s take a look at how to optimize your RI purchases for maximum cost savings.

1. Analyze Your Usage

The first step to optimizing your RI purchases is to analyze your usage. Monitor your usage over time to identify patterns and trends. This will help you understand your compute needs and enable you to make informed purchasing decisions.

2. Determine your trade-offs

In the RI world, more commitment – financial or term – yields more savings but it also results in less flexibility. Sometimes, you will have a great fit between a workload you run and a type of RI. More often – because of how hard it is to predict what compute resources you will need in the future – you will be making some kind of trade-off.

3. Optimize Your Purchase

The third step is to optimize your purchase. Consider purchasing multiple RIs with different configurations and time frames. This will enable you to maximize your cost savings and ensure that you have the capacity you need when you need it.

How can nOps help with Reserve Instance Management?

Choosing the right AWS RI type can be a challenging task. There are numerous RI types and configurations available, and customers must consider their compute needs, time frame, payment options, and cost savings when making their decision. This blog has provided an overview of the different types of AWS RIs, the factors to consider when choosing the right RI type, and how to optimize your RI purchases for maximum cost savings. 

You can employ rightsize RIs, auto-scaling, and spot instances to adapt your computing requirements. Extensive planning and forecasting are needed for this. Plus, anticipating future utilization without any proper metrics stands near impossible. Thus, the nOps ShareSave model can be a game-saver if you want your metrics sorted. Also, even if the chosen pricing model is not helping you save appropriately, with our ShareSave solution, you can consolidate cloud accounts into a single pricing model and offer ongoing visibility to change requests. This helps you easily manage cloud costs and save more money.