Simplifying the EC2 Reserved Instance Model

EC2‘s Reserved Instance model provides you with two benefits: capacity assurance and a lower effective hourly rate in exchange for an upfront payment. After combining customer feedback with an analysis of purchasing patterns that goes back to when we first launched Reserved Instances in 2009, we have decided to simplify the model and are introducing an important set of changes today.

The New Reserved Instance Model
There is now a single type of Reserved Instance and it has three payment options. All of the options continue to provide capacity assurance and discounts that are typically around 63% for a three year term when compared to On-Demand prices.

There are three payment options so that you can decide how you would like to pay for your Reserved Instance throughout the term (in descending order of effective discount):

• All Upfront – You pay for the entire Reserved Instance term (one or three years) with one upfront payment and get the best effective hourly price when compared to On-Demand.
• Partial Upfront – You pay for a portion of the Reserved Instance upfront, and then pay for the remainder over the course of the one or three year term. This option balances the RI payments between upfront and hourly.
• No Upfront – You pay nothing upfront but commit to pay for the Reserved Instance over the course of the Reserved Instance term, with discounts (typically about 30%) when compared to On-Demand. This option is offered with a one year term.

Learning More
If you have any questions about these changes, please take a look at the updated Reserved Instance FAQ. As always, AWS Support is also ready, willing, and able to assist!

— Jeff;