A crash course in AWS pricing models: To reserve or not to reserve?

EC2 capacity planning from a cost-management perspective is still challenging for IT and finance teams.

The first step to achieving a cost-efficient deployment is to familiarize yourself with AWS’ pricing models:

  1. On-demand “pay-as-you-go” is ideal for short-term usage and as such has high hourly usage rates.
  2. Reserved instances requires an up-front, onetime fee with discounted hourly usage rates. Ideal for long-term usage with one- or three-year options available. You may also choose from light, medium and heavy sizes with each offering varied discount rates.
  3. Heavy reservations require you to pay for hourly usage even if you never spin up the matching instance. For light and medium you only pay the hourly usage of what you actually use.
  4. With both light and medium models you can run all your instances 24/7/365. Having a light reservation does NOT mean you need to use the instance in a limited way.

In short, while on-demand is easy to implement, it will prove costly if used long term. RIs offer amazing discounts but require an up-front fee.

For enterprises with complex clouds and multiple business units, visualization becomes increasingly critical as well as challenging to determine actual usage and decide which instances make the most sense.

No matter what your plans, understanding all options makes it much simpler to choose the best model for your cloud.

Click here to learn more about AWS instances or try Cloudyn for free to get clear analytics, actionable recommendations and much more!