Reserved Instances (RIs) in AWS Organizations provide a powerful way to optimize costs across multiple AWS accounts within an organization. When you purchase Reserved Instances, they offer significant discounts compared to On-Demand pricing, typically saving 30-72% depending on the commitment term …Reserved Instances (RIs) in AWS Organizations provide a powerful way to optimize costs across multiple AWS accounts within an organization. When you purchase Reserved Instances, they offer significant discounts compared to On-Demand pricing, typically saving 30-72% depending on the commitment term and payment option selected.
In AWS Organizations, Reserved Instance benefits can be shared across all member accounts within the organization through a feature called RI Sharing. This means when one account purchases a Reserved Instance, the discount can automatically apply to matching instance usage in any linked account within the organization.
Key aspects of Reserved Instances in AWS Organizations include:
1. **Consolidated Billing**: All accounts under an organization share a single payment method, and RI discounts are applied across the consolidated bill to maximize savings.
2. **RI Sharing**: By default, RI benefits are shared across all accounts. However, administrators can turn off RI sharing for specific accounts if needed through the AWS Organizations console.
3. **Blended Rates**: AWS calculates blended rates that combine On-Demand and Reserved Instance costs across the organization, providing a unified view of spending.
4. **Flexibility**: Organizations can purchase Standard RIs for maximum savings or Convertible RIs for more flexibility to change instance attributes during the term.
5. **Management Account Control**: The management account (formerly master account) has visibility into RI utilization across all member accounts and can manage sharing preferences.
6. **Cost Allocation**: Organizations can track which accounts benefit from shared RIs using Cost Explorer and detailed billing reports.
Best practices include analyzing usage patterns across all accounts before purchasing RIs, regularly reviewing RI utilization to ensure optimal coverage, and using AWS Cost Explorer recommendations to identify potential RI purchases that would benefit the entire organization.
Reserved Instances in AWS Organizations
Why Reserved Instances in Organizations Matter
Understanding how Reserved Instances (RIs) work within AWS Organizations is crucial for the Cloud Practitioner exam because it directly relates to cost optimization strategies for enterprises. Many businesses use AWS Organizations to manage multiple AWS accounts, and knowing how Reserved Instance benefits are shared across these accounts can significantly impact billing and cost savings.
What Are Reserved Instances?
Reserved Instances are a billing discount applied to the use of On-Demand Instances in your account. When you purchase a Reserved Instance, you commit to using a specific instance type in a specific region for a 1-year or 3-year term. In return, you receive a significant discount (up to 72%) compared to On-Demand pricing.
There are three payment options: - All Upfront: Pay everything at the beginning for maximum savings - Partial Upfront: Pay some upfront and the rest monthly - No Upfront: Pay nothing upfront, smallest discount
How Reserved Instances Work in AWS Organizations
When you have AWS Organizations set up with consolidated billing enabled, Reserved Instance benefits are automatically shared across all accounts in the organization. This means:
1. Automatic Sharing: If Account A purchases a Reserved Instance but doesn't fully utilize it, Account B can automatically benefit from the unused capacity.
2. Consolidated Billing Requirement: RI sharing only works when consolidated billing is enabled in AWS Organizations.
3. Matching Criteria: The RI discount applies when an instance in any account matches the RI attributes (instance type, region, platform, tenancy).
4. Blended Rates: AWS calculates blended rates across all accounts, combining On-Demand and Reserved Instance costs to show average pricing.
5. Turning Off Sharing: Account owners can disable RI sharing if they want to keep the benefits within their specific account.
Key Benefits of RI Sharing in Organizations
- Maximized Utilization: Unused RI capacity in one account benefits other accounts - Simplified Management: Centralized purchasing and cost optimization - Greater Flexibility: Organizations can purchase RIs strategically based on total usage across all accounts - Cost Visibility: Consolidated billing provides a single bill with detailed usage reports
Exam Tips: Answering Questions on Reserved Instances in AWS Organizations
Tip 1: Remember that RI benefits are shared by default when consolidated billing is enabled. If a question asks about maximizing RI benefits across multiple accounts, AWS Organizations with consolidated billing is the answer.
Tip 2: Know the difference between Reserved Instances and Savings Plans. Both offer discounts for commitment, but Savings Plans provide more flexibility across instance families and regions.
Tip 3: When questions mention cost optimization for multiple AWS accounts, think AWS Organizations and consolidated billing first.
Tip 4: Understand that the management account (formerly master account) receives the consolidated bill and can see usage across all member accounts.
Tip 5: If a question asks about preventing RI sharing between accounts, remember that this can be turned off at the account level.
Tip 6: Questions about achieving the highest discount will typically point toward 3-year terms with All Upfront payment.
Tip 7: Remember that RIs are region-specific. A Reserved Instance purchased for us-east-1 will not apply to instances in eu-west-1.
Common Exam Scenarios
- A company wants to reduce EC2 costs with predictable workloads across 10 accounts → Answer: Purchase RIs with AWS Organizations consolidated billing - How to share RI discounts across accounts → Answer: Enable consolidated billing in AWS Organizations - Which payment option provides the largest discount → Answer: All Upfront with a 3-year term