Reserved Instances (RIs) are a pricing model offered by AWS that provides significant cost savings compared to On-Demand pricing in exchange for a commitment to use specific instance configurations for a one-year or three-year term. This pricing option is ideal for workloads with predictable, stead…Reserved Instances (RIs) are a pricing model offered by AWS that provides significant cost savings compared to On-Demand pricing in exchange for a commitment to use specific instance configurations for a one-year or three-year term. This pricing option is ideal for workloads with predictable, steady-state usage patterns.
There are three payment options available for Reserved Instances:
1. **All Upfront**: Pay the entire cost at the beginning of the term, receiving the maximum discount (up to 72% compared to On-Demand).
2. **Partial Upfront**: Pay a portion upfront with the remainder spread across monthly payments, offering moderate savings.
3. **No Upfront**: No initial payment required, with costs distributed as monthly payments, providing the least discount but maximum flexibility.
Reserved Instances come in two main types:
- **Standard Reserved Instances**: Offer the highest discount but have limited flexibility in modifying instance attributes.
- **Convertible Reserved Instances**: Allow you to exchange for different instance families, operating systems, or tenancies during the term, though with a smaller discount than Standard RIs.
Key benefits of Reserved Instances include:
- **Cost Savings**: Substantial reduction in compute costs for long-term workloads
- **Capacity Reservation**: Option to reserve capacity in specific Availability Zones
- **Budget Predictability**: Fixed pricing helps with financial planning
Reserved Instances apply to various AWS services including Amazon EC2, Amazon RDS, Amazon ElastiCache, Amazon Redshift, and Amazon OpenSearch Service.
For the AWS Cloud Practitioner exam, understanding that Reserved Instances represent a commitment-based discount model for predictable workloads is essential. They are best suited for applications running continuously, such as production databases or core business applications, where usage patterns are well understood and consistent over time.
Reserved Instances - AWS Cloud Practitioner Guide
What are Reserved Instances?
Reserved Instances (RIs) are a billing discount applied to the use of On-Demand Instances in your AWS account. They provide significant cost savings (up to 72% compared to On-Demand pricing) in exchange for committing to a consistent amount of usage for a 1-year or 3-year term.
Why are Reserved Instances Important?
Reserved Instances are crucial for organizations looking to optimize their AWS spending. They represent one of the primary cost optimization strategies in AWS and are essential knowledge for the Cloud Practitioner exam. Understanding RIs helps businesses:
- Reduce overall cloud costs significantly - Plan and budget for predictable workloads - Balance between flexibility and savings
How Reserved Instances Work
Payment Options: 1. All Upfront - Pay everything at the start for maximum savings 2. Partial Upfront - Pay a portion upfront and the rest monthly 3. No Upfront - Pay nothing upfront but commit to monthly payments (smallest discount)
Term Length: - 1-Year Term - Lower commitment, smaller discount - 3-Year Term - Higher commitment, larger discount
Types of Reserved Instances: - Standard RIs - Highest discount but limited flexibility to change instance attributes - Convertible RIs - Lower discount but allows changing instance family, OS, and tenancy
Key Characteristics to Remember
- RIs are not physical instances; they are a billing discount - They apply to EC2, RDS, ElastiCache, Redshift, and DynamoDB - The discount applies automatically when usage matches the RI attributes - Unused RI capacity can be sold in the Reserved Instance Marketplace (Standard RIs only)
Exam Tips: Answering Questions on Reserved Instances
1. Look for keywords - When questions mention steady-state, predictable usage, baseline capacity, or known workloads, Reserved Instances are likely the correct answer.
2. Cost optimization scenarios - If a question asks about reducing costs for applications running 24/7 or for at least one year, think Reserved Instances.
3. Compare with other options - Know the differences: - On-Demand: Flexible but most expensive - Spot Instances: Cheapest but can be interrupted - Reserved Instances: Discounted for committed, predictable workloads - Savings Plans: Similar savings with more flexibility
4. Payment and term questions - Remember: longer terms and more upfront payment equals greater savings. All Upfront + 3-Year = Maximum discount.
5. Flexibility questions - If a scenario requires changing instance types frequently, Convertible RIs or Savings Plans are better than Standard RIs.
6. Eliminate wrong answers - If a question involves unpredictable or short-term workloads, Reserved Instances are typically not the best choice.
Common Exam Scenarios
- A company runs a database server continuously - Reserved Instance is ideal - An application has predictable baseline traffic - Use Reserved Instances for the baseline - Maximum cost savings for a 3-year project - 3-Year All Upfront Reserved Instance - Need flexibility to change instance families - Convertible Reserved Instance or Savings Plans