Reserved Instances

One of the more complex decisions an organization will make is how to best structure their resource purchasing. Organizations that pay full price On Demand are not at all maximizing their AWS spending. Reserved Instances are exactly what they sound like—we agree to a contract price for a fixed duration. We end up paying for the Reserved Instances (RIs) regardless of whether we use them, so it's best to only use them when we know we’ll have a workload running full-time for at least a year. Additionally, we can choose to pay a lump sum all up-front, pay partially upfront with a smaller monthly payment, or pay entirely with monthly payments.

The least expensive options will have the most restrictions and require the most payment upfront. Why would we want to pay anything upfront, especially for a term as long as three years? Isn’t that completely against an OpEx scalable mindset? Well, yes it is. However, in some situations, this option is the best.

If we are certain that we'll have this workload running full-time for at least three years, this is the most efficient way to lower our costs short of rearchitecting into, say, a serverless model. Additionally, some companies, governmental ...