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

Alisha Reyes
Alisha Reyes
— July 2, 2020

New Content: AWS, Azure, Typescript, Java, Docker, 13 New Labs, and Much More

This month, our Content Team released a whopping 13 new labs in real cloud environments! If you haven't tried out our labs, you might not understand why we think that number is so impressive. Our labs are not “simulated” experiences — they are real cloud environments using accounts on A...

Read more
  • AWS
  • Azure
  • DevOps
  • Google Cloud Platform
  • Machine Learning
  • programming
Joe Nemer
Joe Nemer
— June 19, 2020

Kickstart Your Tech Training With a Free Week on Cloud Academy

Are you looking to make a jump in your technical career? Want to get trained or certified on AWS, Azure, Google Cloud Platform, DevOps, Kubernetes, Python, or another in-demand skill?Then you'll want to mark your calendar. Starting Monday, June 22 at 12:00 a.m. PDT (3:00 a.m. EDT), ...

Read more
  • AWS
  • Azure
  • cloud academy content
  • complimentary access
  • GCP
  • on the house
Alisha Reyes
Alisha Reyes
— June 11, 2020

New Content: AZ-500 and AZ-400 Updates, 3 Google Professional Exam Preps, Practical ML Learning Path, C# Programming, and More

This month, our Content Team released tons of new content and labs in real cloud environments. Not only that, but we introduced our very first highly interactive "Office Hours" webinar. This webinar, Acing the AWS Solutions Architect Associate Certification, started with a quick overvie...

Read more
  • AWS
  • Azure
  • DevOps
  • Google Cloud Platform
  • Machine Learning
  • programming
Rebecca Willis
Rebecca Willis
— June 3, 2020

Azure vs. AWS: Which Certification Provides the Brighter Future?

More and more companies are using cloud services, prompting more and more people to switch their current IT position to something cloud-related. The problem is most people only have that much time after work to learn new technologies, and there are plenty of cloud services that you can ...

Read more
  • AWS
  • Azure
  • certification
Alisha Reyes
Alisha Reyes
— June 2, 2020

Blog Digest: 5 Reasons to Get AWS Certified, OWASP Top 10, Getting Started with VPCs, Top 10 Soft Skills, and More

Thank you for being a valued member of our community! We recently sent out a short survey to understand what type of content you would like us to add to Cloud Academy, and we want to thank everyone who gave us their input. If you would like to complete the survey, it's not too late. It ...

Read more
  • AWS
  • Azure
  • blog digest
  • Certifications
  • Cloud Academy
  • OWASP
  • OWASP Top 10
  • Security
  • VPCs
Alisha Reyes
Alisha Reyes
— May 11, 2020

New Content: Alibaba, Azure Cert Prep: AI-100, AZ-104, AZ-204 & AZ-400, Amazon Athena Playground, Google Cloud Developer Challenge, and much more

This month, our Content Team released 8 new learning paths, 4 courses, 7 labs in real cloud environments, and 4 new knowledge check assessments. Not only that, but we introduced our very first course on Alibaba Cloud, and our expert instructors are working 'round the clock to create 6 n...

Read more
  • alibaba
  • AWS
  • Azure
  • gitops
  • Google Cloud Platform
  • lab playground
  • programming
Avatar
Rhonda Martinez
— May 4, 2020

Top 5 Reasons to Get AWS Certified Right Now

Cloud computing trends are on the rise and have been for some time already. Fortunately, it’s never too late to start learning cloud computing. Skills like AWS and others associated with cloud computing are in high demand because cloud technologies have become crucial for many businesse...

Read more
  • Amazon Elastic Book Store
  • Amazon Elastic Compute Cloud (EC2)
  • AWS
  • AWS Certifications
  • Glacier
Alisha Reyes
Alisha Reyes
— May 1, 2020

Introducing Our Newest Lab Environments: Lab Playgrounds

Want to train in a real cloud environment, but feel slowed down by spinning up your own deployments? When you consider security or pricing costs, it can be costly and challenging to get up to speed quickly for self-training. To solve this problem, Cloud Academy created a new suite of la...

Read more
  • AWS
  • Azure
  • Docker
  • Google Cloud Platform
  • Java
  • lab playgrounds
  • Python
Alisha Reyes
Alisha Reyes
— April 30, 2020

Blog Digest: AWS Breaking News, Azure DevOps, AWS Study Guide, 8 Ways to Prevent a Ransomware Attack, and More

  New articles by topicAWS Azure Data Science Google Cloud  Cloud Adoption Platform Updates & New Content Security Women in TechAWSBreaking News: All AWS Certification Exams Now Available Online As an Advanced AWS Technology Partner, C...

Read more
  • AWS
  • Azure
  • blog digest
  • Certifications
  • Cloud Academy
  • programming
  • Security
Avatar
Stuart Scott
— April 27, 2020

AWS Certified Solutions Architect Associate: A Study Guide

Want to take a really impactful step in your technical career? Explore the AWS Solutions Architect Associate certificate. Its new version (SAA-C02) was released on March 23, 2020, though you can still take SAA-C01 through July 1, 2020. This post will focus on version SAA-C02.The AWS...

Read more
  • AWS
  • AWS Certifications
  • AWS Certified Solutions Architect Associate
Alisha Reyes
Alisha Reyes
— April 9, 2020

New on Cloud Academy: AWS Solutions Architect Exam Prep, Azure Courses, GCP Engineer Exam Prep, Programming, and More

Free content on Cloud Academy More and more customers are relying on our technology and content to keep upskilling their people in these months, and we are doing our best to keep supporting them. While the world fights the COVID-19 pandemic, we wanted to make a small contribution to he...

Read more
  • AWS
  • Azure
  • Google Cloud Platform
  • programming
Joe Nemer
Joe Nemer
— April 3, 2020

Breaking News: All AWS Certification Exams Now Available Online

Remote proctoring for all AWS certifications Cloud Academy is an Advanced AWS Technology Partner, and we are happy to announce all AWS certification exams are available online!  What does this mean for you? You can stay focused on your certification goal. Or you can start a certifica...

Read more
  • AWS
  • AWS certification
  • AWS Certifications