Reserved Instance Planning for AWS Solutions Architect Professional
Why Reserved Instance Planning is Important
Reserved Instance (RI) planning is a critical cost optimization strategy that can reduce your AWS compute costs by up to 72% compared to On-Demand pricing. For Solutions Architects, understanding RI planning demonstrates the ability to design cost-effective, sustainable cloud architectures. Organizations running predictable workloads can achieve significant savings through proper RI planning, making it a key competency tested in the professional exam.
What are Reserved Instances?
Reserved Instances are a billing discount applied to the use of On-Demand Instances in your account. They are not physical instances but rather a commitment to pay for a specific instance type in a particular region for a one or three-year term. AWS offers three payment options:
• All Upfront - Pay everything upfront for maximum discount
• Partial Upfront - Pay a portion upfront with reduced hourly rate
• No Upfront - No upfront payment but smaller discount
How Reserved Instance Planning Works
Step 1: Analyze Current Usage
Use AWS Cost Explorer's RI recommendations, which analyze your On-Demand usage over the past 7, 30, or 60 days to identify stable, predictable workloads suitable for reservation.
Step 2: Choose the Right RI Type
• Standard RIs - Highest discount (up to 72%) but limited flexibility. Can be sold on the RI Marketplace.
• Convertible RIs - Lower discount (up to 66%) but can exchange for different instance families, operating systems, or tenancies.
Step 3: Determine Scope
• Regional RIs - Apply discount to usage in any Availability Zone within the region. Provide capacity reservation flexibility.
• Zonal RIs - Apply to a specific Availability Zone and provide capacity reservation guarantee.
Step 4: Select Term Length
• 1-year term - Lower commitment, moderate savings
• 3-year term - Higher savings but longer commitment
Key Concepts for the Exam
Instance Size Flexibility: Regional RIs for Linux/Unix with default tenancy apply discounts across instance sizes within the same family using a normalization factor.
Capacity Reservations: On-Demand Capacity Reservations can be combined with Regional RIs to get both capacity guarantee and billing discount.
Savings Plans Alternative: Compute Savings Plans offer similar discounts with more flexibility across instance families, regions, and even Fargate and Lambda.
RI Coverage and Utilization: Monitor both metrics - coverage shows what percentage of running hours are covered by RIs, while utilization shows how much of purchased RIs are being used.
Exam Tips: Answering Questions on Reserved Instance Planning
• When a scenario mentions steady-state workloads or predictable usage patterns, Reserved Instances or Savings Plans are likely the correct answer.
• If the question emphasizes flexibility to change instance types, Convertible RIs or Compute Savings Plans are preferred over Standard RIs.
• For questions about guaranteed capacity, remember that Zonal RIs or On-Demand Capacity Reservations provide this, not Regional RIs alone.
• When asked about multi-account environments, recall that RI benefits can be shared across accounts within an AWS Organization when RI sharing is enabled.
• Questions mentioning selling unused reservations point toward Standard RIs, as Convertible RIs cannot be sold on the RI Marketplace.
• For maximum cost savings scenarios with stable workloads, choose 3-year All Upfront Standard RIs.
• If the scenario involves Lambda, Fargate, or cross-region flexibility, Compute Savings Plans are more appropriate than EC2 Reserved Instances.
• Always consider the break-even point - RIs typically become cost-effective when utilization exceeds approximately 30-40% of the term.