Skip to main content

Which AWS Reserved Instance Should You Choose?

Choosing your first AWS Reserved Instance can be confusing.

And I am going to walk you through some of the things I think you should consider before taking the plunge into a long term commitment.

A little over 6 months ago AWS changed the way that they sold reserved instances. They introduced new offerings to replace the old Light, Medium, and Heavy model. If you need to purchase a reserved instance today, there are three payment options:

  • All upfront – You pay for the entire Reserved Instance term (one or three years) with one upfront payment and get the best effective hourly price when compared to On-Demand.
  • Partial upfront – You pay for a portion of the Reserved Instance upfront and then pay for the remainder over the course of the one or three year term. This option balances the RI payments between upfront and hourly.
  • No upfront – You pay nothing upfront but commit to paying for the Reserved Instance over the course of the Reserved Instance term, with discounts (typically about 30%) when compared to On-Demand. This option is offered with a one year term.

Do you need an AWS Reserved Instance?

If you have a normal dedicated instance running on AWS that needs to be available 24/7 over the long term (like an e-commerce website), then the answer is probably yes. Otherwise, you are just wasting money. So assuming your project justifies it, we’ll use this as an example:

Let’s assume we have the following instance running on AWS.
AWS Reserved Instances

How do you convert an existing EC2 instance to an AWS Reserved Instance?

The truth is, you don’t. This was confusing to me when I purchased my first Reserved Instance. A Reserved Instance isn’t a different piece of hardware compared to your dedicated instance; it’s nothing more than an accounting term. It’s how you’re billed.

When you purchase a Reserved Instance, the AWS accounting algorithm will automatically apply the Reserved Instance rate to any single applicable EC2 instance. Criteria include:

  • Region and Availability Zone.
  • Instance type (micro, small, large, etc.).
  • The instance’s current state (i.e., it must be running).
  • The instance does not currently have an AWS Reserved Instance applied to it already.

So what you need to concentrate on is matching the region, availability zone, and instance type (micro, small, large, etc.) of your current Dedicated Instance to your soon-to-be-purchased Reserved Instance. So, let’s go ahead and purchase our Reserved Instance.

Purchasing a Reserved Instance

Note: Make sure you are in the same Region as your Dedicated Instance before starting this step.

  1. Go to your EC2 Dashboard and Select ‘Reserved Instances’ in the left-hand column.
  2. Then click on ‘Purchase Reserved Instances’ and you should be presented with the following screen:

Purchase AWS Reserved Instances - Steps
Confirm each of the following:

  1. Choose your Platform.
  2. Choose your Instance type.
  3. Choose your availability Zone.
  4. Choose your term.
  5. Leave Tenancy as Default.
  6. Leave offering as “Any”.

After that, you should be presented with a screen similar to the one below.
Purchase AWS Reserved Instances - Add to Cart
This is where your needs will be unique to your project, so you’ll have to choose this one for yourself.

When we work out how much per year each one of my possible alternatives would cost, we come up with the following:

No Upfront           $140/yr     
Partial Upfront   $131/yr  
All Upfront           $128.00/yr

I would probably go with the No Upfront as it doesn’t cost you any money initially and the overall difference is only $12. However as I said before, it is up to each individual to work out what best suits their needs. Just be sure that you really want this instance for the time period that you have chosen.

From there you just add it to your cart and make the purchase. Remember there is no going back, so if you purchase an AWS Reserved Instance for 12 months and decide you don’t want it you can’t get your money refunded from AWS. You can, however, sell your instance to someone else. But I am not in a position to offer any solid advice in this area.
It’s always best to carefully plan ahead.

Avatar

Written by

Michael Sheehy

I have been UNIX/Linux System Administrator for the past 15 years and am slowly moving those skills into the AWS Cloud arena. I am passionate about AWS and Cloud Technologies and the exciting future that it promises to bring.

Related Posts

Avatar
John Chell
— June 13, 2019

AWS Certified Solutions Architect Associate: A Study Guide

The AWS Solutions Architect - Associate Certification (or Sol Arch Associate for short) offers some clear benefits: Increases marketability to employers Provides solid credentials in a growing industry (with projected growth of as much as 70 percent in five years) Market anal...

Read more
  • AWS
  • AWS Certifications
Chris Gambino and Joe Niemiec
Chris Gambino and Joe Niemiec
— June 11, 2019

Moving Data to S3 with Apache NiFi

Moving data to the cloud is one of the cornerstones of any cloud migration. Apache NiFi is an open source tool that enables you to easily move and process data using a graphical user interface (GUI).  In this blog post, we will examine a simple way to move data to the cloud using NiFi c...

Read more
  • AWS
  • S3
Avatar
Chandan Patra
— June 11, 2019

Amazon DynamoDB: 10 Things You Should Know

Amazon DynamoDB is a managed NoSQL service with strong consistency and predictable performance that shields users from the complexities of manual setup.Whether or not you've actually used a NoSQL data store yourself, it's probably a good idea to make sure you fully understand the key ...

Read more
  • AWS
  • DynamoDB
Avatar
Andrew Larkin
— June 6, 2019

The 11 AWS Certifications: Which is Right for You and Your Team?

As companies increasingly shift workloads to the public cloud, cloud computing has moved from a nice-to-have to a core competency in the enterprise. This shift requires a new set of skills to design, deploy, and manage applications in cloud computing.As the market leader and most ma...

Read more
  • AWS
  • AWS Certifications
Sam Ghardashem
Sam Ghardashem
— May 15, 2019

Aviatrix Integration of a NextGen Firewall in AWS Transit Gateway

Learn how Aviatrix’s intelligent orchestration and control eliminates unwanted tradeoffs encountered when deploying Palo Alto Networks VM-Series Firewalls with AWS Transit Gateway.Deploying any next generation firewall in a public cloud environment is challenging, not because of the f...

Read more
  • AWS
Joe Nemer
Joe Nemer
— May 3, 2019

AWS Config Best Practices for Compliance

Use AWS Config the Right Way for Successful ComplianceIt’s well-known that AWS Config is a powerful service for monitoring all changes across your resources. As AWS Config has constantly evolved and improved over the years, it has transformed into a true powerhouse for monitoring your...

Read more
  • AWS
  • Compliance
Avatar
Francesca Vigliani
— April 30, 2019

Cloud Academy is Coming to the AWS Summits in Atlanta, London, and Chicago

Cloud Academy is a proud sponsor of the 2019 AWS Summits in Atlanta, London, and Chicago. We hope you plan to attend these free events that bring the cloud computing community together to connect, collaborate, and learn about AWS. These events are all about learning. You can learn how t...

Read more
  • AWS
  • AWS Summits
Paul Hortop
Paul Hortop
— April 2, 2019

How to Monitor Your AWS Infrastructure

The AWS cloud platform has made it easier than ever to be flexible, efficient, and cost-effective. However, monitoring your AWS infrastructure is the key to getting all of these benefits. Realizing these benefits requires that you follow AWS best practices which constantly change as AWS...

Read more
  • AWS
  • Monitoring
Joe Nemer
Joe Nemer
— April 1, 2019

AWS EC2 Instance Types Explained

Amazon Web Services’ resource offerings are constantly changing, and staying on top of their evolution can be a challenge. Elastic Cloud Compute (EC2) instances are one of their core resource offerings, and they form the backbone of most cloud deployments. EC2 instances provide you with...

Read more
  • AWS
  • EC2
Avatar
Nitheesh Poojary
— March 26, 2019

How DNS Works – the Domain Name System (Part One)

Before migrating domains to Amazon's Route53, we should first make sure we properly understand how DNS worksWhile we'll get to AWS's Route53 Domain Name System (DNS) service in the second part of this series, I thought it would be helpful to first make sure that we properly understand...

Read more
  • AWS
Avatar
Stuart Scott
— March 14, 2019

Multiple AWS Account Management using AWS Organizations

As businesses expand their footprint on AWS and utilize more services to build and deploy their applications, it becomes apparent that multiple AWS accounts are required to manage the environment and infrastructure.  A multi-account strategy is beneficial for a number of reasons as ...

Read more
  • AWS
  • Identity Access Management
Avatar
Sanket Dangi
— February 11, 2019

WaitCondition Controls the Pace of AWS CloudFormation Templates

AWS's WaitCondition can be used with CloudFormation templates to ensure required resources are running.As you may already be aware, AWS CloudFormation is used for infrastructure automation by allowing you to write JSON templates to automatically install, configure, and bootstrap your ...

Read more
  • AWS
  • CloudFormation