Reserved Instances

What are reserved instances

The public cloud resources that are committed to or purchased in advance by the users in exchange for a reduced price.  In AWS, a reserved instance is a reservation of resources and capacity, for either one or three years, for a particular Availability Zone within a region.  Reserved instances for Amazon generally refer to Elastic Compute Cloud (EC2) but Amazon also offers reservations for databases and CDN.  The primary reason for making a reservation is for substantially lower prices than On-Demand prices, which allows you to lower the cost of the resources you’re already using. Another reason is to reserve capacity in your chosen Availability Zone.  Having capacity reserved in a specific Availability Zone can be particularly useful if your infrastructure uses autoscaling and frequently experiences spikes in usage.  And finally, another reason is for availability, by reserving in another Availability Zone.   If there’s an earthquake on the west coast, it may be worthwhile to be first in line for an east coast Availability Zone.

In terms of compute options and configurations, Reserved Instances and On Demand instances are the same. The only difference between the two is that a Reserved Instance is one you rent (“reserve”) for a fixed duration, and in return you receive a discount on the base price of an On-Demand instance.

Other attributes of reserved instances

  • Reserved Instances have long contract terms (usually, one or three years). This means that you should only purchase reservations for an instance specification that you’ll use over the long term.
  • Most Reserved Instances are billed as a lump sum each month for each hour in that month. You’re billed for this amount whether you ran an instance that matched your reservation or not. Reserved Instances provide the maximum discount for instance types that you use often and for long periods of time.
  • Reserved Instances can’t be canceled, but some reserved instances can be modified, subject to certain restrictions.
  • If you decide you don’t need a reserved instance after you purchase it, you can often sell the RI on the marketplace for that providers RIs.

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