Concepts
Reserved Instances (RIs) provide a significant discount compared to On-Demand pricing for EC2 and RDS instances on AWS, in exchange for a commitment to a specific instance type and duration. Understanding the flexibility of RIs is crucial as it can influence cost optimization strategies and your ability to adapt to changing application needs without losing the financial benefits of RI investment.
1. Standard vs. Convertible Reserved Instances
Standard Reserved Instances:
- Offer up to 75% discount compared to On-Demand.
- Locked to a specific instance family, size, region, tenancy, and operating system.
- Limited flexibility: Can change availability zones within the same region, or shift between instance sizes within the same family using normalization factors.
Convertible Reserved Instances:
- Offer up to 54% discount compared to On-Demand.
- Flexibility to change the instance type, operating system, or tenancy, as long as the exchange leads to reserved instances of equal or greater value.
- Ideal for users with changing requirements but still looking for significant cost savings.
2. RI Flexibility within Same Instance Family (Size Flexibility)
AWS introduced size flexibility for Standard RIs, which automatically applies to instances within the same region and instance family. For example, if you have a m5.large RI, and you want to launch an m5.xlarge, the m5.large RI’s discount will automatically apply to half of the usage of the m5.xlarge instance due to normalization factor.
| Instance Size | Normalization Factor |
|---|---|
| m5.large | 4 |
| m5.xlarge | 8 |
| m5.2xlarge | 16 |
| m5.4xlarge | 32 |
| m5.12xlarge | 96 |
| m5.24xlarge | 192 |
In this example, m5.xlarge has a normalization factor of 8, and m5.large has a normalization factor of 4, so one m5.large RI would cover half of an m5.xlarge instance’s cost.
3. Changing Scope of Reserved Instances
When buying a Standard RI, you must specify a region, and the RI will apply to instance usage in any availability zone within that region. You can modify the RI to change the availability zone or move the RI to a regional benefit to apply to any zone in the region. Note that moving a RI from one region to another is not possible.
4. Convertible RI Exchanges
If you need more substantial changes in instance type or other attributes, Convertible RIs are a better choice. If the requirements of your application change, you can exchange one or more convertible RIs for another one, with some conditions:
- The new RI must be of equal or greater value than the original.
- You can even merge multiple RIs into one or divide them into smaller RIs.
In summary, AWS Reserved Instances offer a balance between cost savings and flexibility. While Standard RIs provide higher discounts and some level of adaptability within the same instance family via size flexibility, Convertible RIs enable broader changes in instance attributes that can be invaluable for dynamically changing workloads. Understanding your workload and capacity requirements is key to choosing the right type of RI and fully leveraging the benefits without compromising on the necessary operational flexibility.
Answer the Questions in Comment Section
True or False: You can sell your unused Amazon EC2 Reserved Instances on the Reserved Instance Marketplace.
- True
Explanation: AWS allows customers to sell their unused Reserved Instances on the Reserved Instance Marketplace, providing flexibility in managing the Reserved Instances portfolio.
True or False: Reserved Instances can be applied to any instance type within the same instance family.
- True
Explanation: Reserved Instances offer instance size flexibility within the same instance family on EC2, permitting you to change the size (e.g., from mlarge to mxlarge) and still benefit from the reserved pricing.
Which Amazon RDS feature provides the benefit of reserved pricing?
- A) Read Replicas
- B) Multi-AZ deployments
- C) Reserved Instances
- D) Automated backups
Answer: C) Reserved Instances
Explanation: Amazon RDS offers Reserved Instances that provide a discount compared to on-demand instance pricing and apply to the instance use.
What effect does switching from one availability zone to another within the same region have on EC2 Reserved Instances?
- A) It will void the Reserved Instance pricing.
- B) No effect; Reserved Instances are scoped to the region, not the zone.
- C) It will result in additional charges.
- D) It requires manual adjustment for the Reserved Instance to apply.
Answer: B) No effect; Reserved Instances are scoped to the region, not the zone.
Explanation: EC2 Reserved Instances offer flexibility by automatically applying to instances in any Availability Zone within the same region.
True or False: You can change the Availability Zone, scope, network platform, or instance size (within the same instance family) of your reserved instances at any time.
- False
Explanation: While Reserved Instances provide some flexibility, changes are limited. For example, you cannot change the network platform or the instance family. You can generally only modify the availability zone and the instance size within the same instance family if it’s configured with regional benefit.
When a Reserved Instance expires, what happens to the EC2 instances associated with it?
- A) They are automatically terminated.
- B) They continue to run at on-demand rates.
- C) They are automatically converted to Spot Instances.
- D) They are stopped until you renew the reservation.
Answer: B) They continue to run at on-demand rates.
Explanation: After a Reserved Instance expires, the EC2 instances associated with it continue to run and are simply charged at the standard on-demand rate.
True or False: AWS Reserved Instances require upfront payment for the entire reservation term.
- False
Explanation: AWS Reserved Instances offer payment options that include all upfront, partial upfront, or no upfront payments, allowing customers to choose the payment structure that best meets their financial needs.
What is the minimum term length for an EC2 Reserved Instance?
- A) 1 month
- B) 6 months
- C) 1 year
- D) 3 years
Answer: C) 1 year
Explanation: The minimum term length for an EC2 Reserved Instance is one year, with options also commonly available for three-year terms.
Can a Reserved Instance be moved between different AWS accounts?
- A) Yes, but only within the same organization.
- B) Yes, at any time.
- C) No, it is bound to the account it was purchased on.
- D) Yes, but only through the Reserved Instance Marketplace.
Answer: A) Yes, but only within the same organization.
Explanation: Reserved Instances can be moved between accounts within the same organization, allowing for consolidated billing and flexible utilization of Reserved Instances.
True or False: Convertible Reserved Instances allow you to exchange one Convertible Reserved Instance for another with different configurations.
- True
Explanation: Convertible Reserved Instances provide even more flexibility, allowing you to change the instance family, operating system, or tenancy during the reservation period.
Which of the following statements best describes the benefit of Reserved Instances?
- A) They provide maximum elasticity for applications with highly variable workloads.
- B) They allow for temporary capacity increases with no long-term commitments.
- C) They offer significant cost savings over on-demand instances with a commitment to use specific capacity over a term.
- D) They offer the lowest cost option for compute capacity in AWS.
Answer: C) They offer significant cost savings over on-demand instances with a commitment to use specific capacity over a term.
Explanation: Reserved Instances provide significant cost savings compared to on-demand pricing in exchange for committing to a specified amount of capacity over a term, typically 1 or 3 years.
Can you apply the cost benefit of a Reserved Instance to instances launched by an Amazon ECS or an Amazon EKS service?
- A) No, Reserved Instances are only for EC2 instances launched manually.
- B) Yes, but only for Amazon ECS.
- C) Yes, as long as the instances match the parameters of the Reserved Instance.
- D) No, because Amazon ECS and EKS services use a different billing model.
Answer: C) Yes, as long as the instances match the parameters of the Reserved Instance.
Explanation: The Reserved Instance pricing can apply to any EC2 instance that matches the parameters of the reservation, regardless of the service (ECS or EKS) used to launch the instance.
This blog post about Reserved Instance flexibility really helped me understand the concepts for my AWS Certified Cloud Practitioner exam, thanks!
I love how the blog broke down the types of Reserved Instances and their modifications. Very useful for my revision!
Quick question: Can someone explain how Reserved Instances are different from Savings Plans?
Thanks for the clear explanation. It made understanding RI flexibility much easier.
The blog content is good, but I think it could use more diagrams to explain the RI modifications better.
Does anyone have any real-world scenarios where modifying Reserved Instances helped save costs?
Thanks, this blog post clarified a lot of my doubts about Reserved Instances.
Great content! How often should one review their Reserved Instance usage?