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How to Save Money on Reserved Instances?

The way we create and use applications has changed thanks to the cloud. It is a great platform for creating safe, scalable, and affordable solutions for your company’s needs. You can benefit from a variety of services that cloud providers provide, but you must choose the ones that best meet your company’s needs. Amazon Web Services (AWS), which provides a wide range of products and services like computational power, storage space, networking capabilities, etc., is the most well-liked service among developers. AWS has its own billing system, and it can be challenging to analyze because there are so many different things that might influence expenses. This essay will concentrate on how to use AWS-reserved instances to save money.

When is it necessary to have a reserved instance?

  • If you know your workload will be the same for a few years
  • If you are going to be using AWS for a long time
  • If your environment is predictable and fixed, such as having consistent CPU load, memory, or disk usage patterns.

For example applications with a high load during peak hours and no need to run 24/7; applications with a low load during non-peak hours and required availability at all times; applications that run consistently every hour of the day throughout the year.

What type of instances are necessary?

When you launch an instance, the instance type has to match the workload. If you have a CPU-intensive application, then you need a larger instance such as an M4 or R5. But if your workload is relatively small, then a micro or small will do just fine.

Which region and availability zone is preferable for the instances?

The location and availability zone you wish to use for your reserved instances should be your priority. Over time, there have been more options for AWS regions in Europe, North America, and Asia-Pacific. Some are still very new, while others have already gained a lot of popularity among users and developers.

In Europe: Dublin (Ireland), Frankfurt (Germany), and London (UK). In North America: Toronto (Canada), Northern Virginia – US East 2 Region – US West 2 Region – US East 1 Region – US West 1 Region – EU North 1 Region – EU Central 1 Region

In Asia-Pacific: Sydney (Australia); Seoul (South Korea); Mumbai (India)

Which tenancy is the best for the instances?

If you are using the instances for dev/test, then you can choose the default tenancy.

If you are actually running your production workloads on Amazon EC2 instances, then a dedicated tenancy is the way to go.

Do you need a shared or dedicated instance?

You can save on your AWS Reserved Instance (RI) costs by opting for a shared RI when you don’t need the full power and memory of a dedicated instance. Dedicated RIs are better suited to workloads that require a lot of processing power or RAM, while shared RIs are ideal if you’re running multiple applications on an individual server.

If your application is CPU-bound, meaning it has high CPU demand but low memory requirements, then using a dedicated RI will likely be the cheapest option for you. If your application requires large amounts of memory in addition to CPU cycles—like databases or caches—then buying a dedicated RI might make sense due to its lower per-hour cost. As long as there’s enough capacity available within Amazon’s cloud platform at any given time, it doesn’t matter whether you use shared or dedicated instances; however, if capacity becomes limited during peak times (like holidays), then choosing one over another could impact how quickly your customers experience lag time due to slow responses from the web app.”

What instance family is needed?

Instance families are a collection of instances that share the same hardware specifications. For example, if you have a memory-intensive application, then you would need to use the memory-optimized instance family. If your application is CPU-intensive, you should use the compute-optimized instance family. The most common instance families are general-purpose, memory-optimized, compute-optimized, and GPU-enabled.

Do you want to save more with an all-upfront or partial upfront payment?

You have the option of making a partial ahead payment or an entire upfront payment to save money on Reserved Instances. Knowing the benefits and drawbacks of each payment option will help you choose which is ideal for your business.

  • Payment in full up front: In this case, you pay for the entire term upfront. This means that because you have already paid for the entire term, there won’t be any negative effects on cost if your workload increases throughout the term (for instance, if some developers join your team).
  • Partial upfront: With this kind of reservation payment, only a portion is made in advance, with the remaining balance required at the time of launch (i.e., when AWS starts using it). If the remaining balance is not paid in full before the expiration date, all unused resources will be automatically returned to inventory, provided that no other reservation or subscription has a greater priority at that time than yours (if any).


This guide is a good start for anyone who wants to save money on AWS Reserved Instances. We hope you enjoyed reading it and learned something new about the topic!