Cloudwiry AWS Optimization: 4 Ways to Leverage Standard Reserved Instances

Written by Aditya Datta

What you need to know before you buy Standard Reserved Instances

Standard Reserved Instances are regarded as the #1 recommended quick fix for reducing your AWS EC2 bill. RI’s enable you to get substantial discount over on-demand prices while providing flexible spending for your capital expense budget dollars. In spite of these advantages, Standard Reserved Instances remain an unsought option for many AWS customers. Simply put, you are locked in for fixed pricing, instance type, and application architecture. Its efficacy is largely dependent upon accurate forecasting for future needs which can be a complex and laborious process.

As an example, while M3.Medium’s would have been great when introduced on Jan 2014, just a short 6 months later, T2.Mediums may have been ideal for your needs after some application performance tuning. Development is excited to move to SPOT / Lambda, and now the onus falls to you to notify your CFO of liability being carried forward. Each Reserved Instance contract is independent and needs to be tracked for ROI, utilization and expiry. It is too small a problem to worry about until it gets your CFO’s attention due to a lapse in renewal.

Moore’s Law: As AWS has deviated from Moore’s law for CPU pricing, there have been significant AWS price breaks over the years and RI contracts have at times become a liability. Be Sure to check out Zoran’s post on AWS historical pricing.

Tip #1 Reserved Instance Automation

Consider setting up RI switcher automation that converts your more expensive on demand instances to cheaper unused Reserved instances during maintenance window for production instance and/or for non production instances at launch time.

Tip #2 Track End Dates

Setup Reserved instance expiry notifications to stay on top of your contracts.

Tip #3 Bring Your Own Licence (BYOL)

If you have existing licenses bring them with you to the AWS Cloud. Ask us how we help our customers purchase Windows BYOL Standard Reserved instance.

Tip #4 Consider Convertible Reserved Instances

How about convertible RIs? We love em and are running them @ > 98% utilization for our beta customers, converting weekly. Ask us about EDP if you would like to get a overall discount on your AWS spend and leverage your Capital Expense Budget.