What are reserved instances?

Reserved instances are public cloud resources that are committed to or purchased in advance 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.


Why use reserved instances?

The primary reason for making a reservation is to take advantage of substantially lower prices than on-demand prices, allowing you to lower the cost of the resources you’re already using. Another reason is to reserve capacity in your chosen availability zone which can be particularly useful if your infrastructure uses autoscaling and frequently experiences spikes in usage.  And finally, by reserving in another availability zone, if there’s a disaster such as an earthquake on the west coast, for example, it may be worthwhile to be first in line for an east coast availability zone.


Reserved vs. on-demand instances

In terms of compute options and configurations, reserved 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 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 it on the marketplace for that provider’s reserved instances.


Suggested Reading and Related Topics

  • Autoscaling: Learn about how you can automatically grow or shrink the number of compute resources that are allocated to your application.
  • Availability zone: Understand what availability zones are and how they may be implemented.