Four Key Steps to Accurate AWS Reserved Instance Purchases

Nothing can save you money on your cloud costs like using Reserved Instances. They require no changes or optimization to your infrastructure from your technical teams plus you can save up to 60% on your Cloud spend — as long as you’re buying the right RIs at the right time.

Throughout our Reserved Instances series, you’ve learned all you need to know to purchase Reserved Instances confidently and competently. Now that you’re ready to launch into your cost-optimized future using RIs, take one final look at these four key tips for using RIs as effectively as possible.

1. Make small, frequent purchases

Actually, make small purchases of short-term (1year) RIs on a schedule you hold sacred. Making small frequent reservation purchases is one of the easiest practices to help maximize cost efficiency. Small purchases tend to be uncontroversial, facilitate buy-in from key stakeholders and help identify how your procurement process needs to evolve as it relates to the Cloud. Plus, if you purchase short-term reservations often, you will have a steady cycle of reservations expiring; this allows for subsequent purchases of new reservations that align to changes over time in your infrastructure.

2. Buy Partial or No Upfront Reservations

Purchasing RIs using the “Partial Upfront” or “No Upfront” payment option results in AWS generating an “injected line item” within your DBR file every month. This “injected line item” has information about how many hours you paid for that month, how many you’ve used, and the cost of the unused hours. This additional data is invaluable for creating a complete ROI picture; it’s also not available if you purchased your RIs using the “All Upfront” payment option.

3. Evaluate and Align

Having the flexibility to evolve your infrastructure rapidly is a key advantage of hosting your deployment in the Cloud; those advantages should not preclude realizing savings and ROI. Using the data from your frequent, scheduled RI purchases, you can generate ROI reports and evaluate how effective those reservations are being applied. Additionally, our RI Planner can help you identify any modifications you need to make to align already purchased RIs such that they are more effectively utilized.

4. Make informed choices

When planning your RI needs, appoint a person who is dedicated to making reservation purchases; having the history from past purchases plus the context from engaging stakeholders on upcoming budget or infrastructure changes will inform planned purchases. Most importantly, use Cloudability’s RI Planner!  One of the most common mistakes when purchasing AWS Reserved Instances is calculating your RI needs according to overall utilization rate over a given period of time. This is an inaccurate calculation method with the potential to misinform your RI purchases. For example, If three of a business’s instances run 30% of the time, then an overall utilization-based approach to determining RI needs would result in the purchase of three corresponding Reservations. However, if all three of the reservations regularly run at different times, then they combine into a 90% utilization rate requiring a different RI purchase decision. The best RI purchasing decisions are based on hourly instance counts of each instance type per OS and availability zone — calculations that Cloudability is happy to do for you automatically, with our Reserved Instance Planner tool.

It’s time for you to start saving money with RIs. Log in or start a free trial of Cloudability to put your knowledge to work with our Reserved Instance Planner, and optimize your cloud costs today.

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