Amazon EC2 Reserved Instances
Amazon EC2 Reserved Instances enable you to maintain the benefits of elastic computing while lowering costs and reserving capacity. With Reserved Instances you pay a low, one-time fee and in turn receive a significant discount on the hourly charge for that instance. Reserved Instances can provide substantial savings over owning your own hardware or running only On-Demand instances as well as help assure that the capacity you need is available to you when required.
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Features
- Reserved Instances are available in three different types: Light, Medium, and Heavy Utilization.
- Reserved Instances can save you up to 71% over On-Demand rates.
- Reserved Instances provide a capacity reservation, so that you can have confidence in your ability to launch the number of instances you have reserved when you need them.
- Reserved Instances are easy to use and require no change to how you use EC2. When computing your bill, our system will automatically apply Reserved Instance rates first to minimize your costs. An instance hour will only be charged at the On-Demand rate when your total quantity of instances running that hour exceeds the number of applicable Reserved Instances you own.
- Reserved Instances can be purchased for 1 or 3 year terms.
- Reserved Instances are available in all AWS regions. Reserved Instances are also available in Amazon VPC and Dedicated Instances.
- Reserved Instances can be purchased for Amazon EC2 running Linux/UNIX, SUSE Linux, Microsoft Windows Server, and Microsoft SQL Server platforms.
- Reserved Instances are eligible for volume discounts, which can save you an additional 10% when you spend more than $250,000 on Reserved Instances or an additional 20% when you spend more than $2,000,000 on Reserved Instances. Customers who spend more than $5,000,000 on Reserved Instances should contact us for additional discounts.
Reserved Instance Types
Reserved Instances (“RIs”) allow you to make a low, one-time payment to reserve instance capacity and further reduce your on-going Amazon EC2 costs. There are multiple Reserved Instance types shown below that enable you to balance the amount you pay upfront with your effective hourly price:
- Light Utilization RIs – Light Utilization RIs offer the lowest upfront payment of all of the Reserved Instance types. Along with this low upfront payment, you’ll receive a significantly discounted hourly usage fee. Light Utilization RIs allow you to turn off your instance at any point and not pay the hourly fee. Light Utilization RIs are ideal for periodic workloads that only run a couple of hours a day, a few days per week, or very sporadically (like Disaster Recovery where they hardly ever are needed, but when they are, you must be sure you have the reserved capacity to handle). Using Light Utilization RIs, you can save up to 42% for a 1-year term and 56% for a 3-year term vs. running On-Demand Instances. If you’re trying to find a break-even utilization, you’re economically advantaged using Light Utilization Linux RIs (vs. On-Demand Instances) if you plan to use your instance more than 35% of a 1-year term or 8% of a 3-year term.
- Medium Utilization RIs – Medium Utilization RIs are the exact same Reserved Instances that EC2 has offered for the last several years. They have a higher upfront payment than Light Utilization RIs, but a much lower hourly usage fee. Medium Utilization RIs allow you to turn off your instance at any point and not pay the hourly fee. Medium Utilization RIs are best suited for workloads that run most of the time, but have some variability in usage (like web server traffic where demand may increase or decrease throughout the year). Using Medium Utilization RIs, you can save up to 49% for a 1-year term and 66% for a 3-year term vs. running On-Demand Instances. If you’re trying to find a break-even utilization, you’re economically advantaged using Medium Utilization Linux RIs (vs. Light Utilization Reserved Instances) if you plan to use your instance more than 69% of a 1-year term or 44% of a 3-year term.
- Heavy Utilization RIs – Heavy Utilization RIs offer the most absolute savings of any Reserved Instance type. They’re most appropriate for steady-state workloads where you’re willing to commit to always running these instances in exchange for our lowest hourly usage fee. With this RI, you pay a little higher upfront payment than Medium Utilization RIs, a significantly lower hourly usage fee, and you’re charged that lower hourly rate for every hour in the Reserved Instance term you purchase. Using Heavy Utilization RIs, you can save up to 54% for a 1-year term and 71% for a 3-year term vs. running On-Demand Instances. If you’re trying to find a break-even utilization, you’re economically advantaged using Heavy Utilization Linux RIs (vs. Medium Utilization Reserved Instances) if you plan to use your instance more than 85% of a 1-year term or 76% of a 3-year term.
To illustrate when to choose each Reserved Instance option, the table below shows the possible savings for Light, Medium, and Heavy Utilization Reserved Instances over On-Demand rates. The higher your utilization over your Reserved Instance term, the more savings Reserved Instances provide.
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Utilization Rate = % of time your instance is running: 30% utilization of a 3 year term = 10.8 months
* rates are compared for an m1.xlarge instance 3-year Reserved Instance, % savings on effective hourly rates are roughly the same for all instance types
* rates are compared for an m1.xlarge instance 3-year Reserved Instance, % savings on effective hourly rates are roughly the same for all instance types
Another way to view the utilization rates above is in terms of aggregate usage. If you purchase a 3-year term Medium Reserved Instance, you need only run that instance for a total of 8.7 months over the course of the 3-year term (24% of the term) for your costs to equal those of On-Demand. Any usage beyond this amount incrementally increases your savings.
Reserved Instance Pricing
Reserved Instances
Reserved Instances give you the option to make a low, one-time payment for each instance you want to reserve and in turn receive a significant discount on the hourly charge for that instance. There are three Reserved Instance types (Light, Medium, and Heavy Utilization Reserved Instances) that enable you to balance the amount you pay upfront with your effective hourly price.
The following tables display the Reserved Instance Prices. In addition to Reserved Instances for Linux/UNIX and Windows operating systems specified below, we also offer Reserved Instances for Amazon EC2 running SUSE Linux Enterprise Server and Amazon EC2 running Microsoft SQL Server.Dedicated Reserved Instances are also available.
Linux
Light Utilization Reserved Instances
Windows
Light Utilization Reserved Instances
Linux
Medium Utilization Reserved Instances
Windows
Medium Utilization Reserved Instances
Linux
Heavy Utilization Reserved Instances
Windows
Heavy Utilization Reserved Instances
Reserved Instances can be purchased for 1 or 3 year terms, and the one-time fee per instance is non-refundable. Light and Medium Utilization Reserved Instances also are billed by the instance-hour for the time that instances are in a running state; if you do not run the instance in an hour, there is zero usage charge. Partial instance-hours consumed are billed as full hours. Heavy Utilization Reserved Instances are billed for every hour during the entire Reserved Instance term (which means you’re charged the hourly fee regardless of whether any usage has occurred during an hour).
If Microsoft chooses to increase the license fees that it charges for Windows, we may correspondingly increase the per-hour usage rate for previously purchased Reserved Instances with Windows. The initial one-time payment for a Reserved Instance will be unaffected in this situation. Any such changes would be made between Dec 1 – Jan 31, and with at least 30 days’ notice. If the per-hour usage rate does increase, you may continue to use your Reserved Instance with Windows with the new per-hour usage rate, convert your Reserved Instance with Windows to a Reserved Instance with Linux, or request a pro rata refund of the upfront fee you paid for the Reserved Instance with Windows.
Reserved Instances are available for Linux/UNIX, Windows and SUSE Linux Enterprise operating systems. You can also optionally reserve instances in Amazon VPC at the same prices as shown above. Click here to learn more about Reserved Instances.
Reserved Instance Volume Discounts
When you have purchased a sufficient number of Reserved Instances in an AWS Region, you will automatically receive discounts on your upfront fees and usage fees for future purchases of Reserved Instances in that AWS Region. Reserved Instance Tiers are determined based on the total list price (non-discounted price) of upfront fees for the active Reserved Instances you have per AWS Region. A complete list of the Reserved Instance Tiers is shown below:
Reserved Instance Volume Discounts |
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Total Reserved Instances |
Upfront Discount |
Hourly Discount |
Less than $250,000 |
0% |
0% |
$250,000 to $2,000,000 |
10% |
10% |
$2,000,000 to $5,000,000 |
20% |
20% |
More than $5,000,000 |
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For example, as soon as you have active Reserved Instances with total list price of upfront fees totaling more than $250,000 in a single AWS Region, you will automatically receive a 10% discount on both upfront and hourly fees for all future Reserved Instance purchases in that AWS Region, and those discounts will continue to apply to new Reserved Instances as long as you continue to qualify for the discount tier.
To illustrate, let's assume you currently have $200,000 worth of active Reserved Instances in us-east-1. You purchase 75 Reserved Instances at $1000 each. That's a total of $75,000. The first $50,000 of this purchase would be discounted at 0 percent. The remaining $25,000 of your purchase will be discounted by 10 percent, so you will only be charged $22,500 for it, and you will pay discounted hourly fees on those Reserved Instances.
To learn more about Reserved Instance Tiers, please visit the “Understanding Reserved Instance Tiers” portion of the Amazon EC2 User Guide.
Comparing Reserved Instances to Doing It Yourself
With do-it-yourself options such as collocation or managed hosting, you know that your servers are always available. Reserved Instances provide the same capacity and cost savings, but with greater flexibility and less effort.
Direct costs of do-it-yourself solutions include hardware, facility fees, and maintenance. Doing it yourself requires dedicated support resources within your organization, which result in additional indirect costs and distraction to your core business. When you do-it-yourself, you only have access to a set number of physical servers; any hardware problems result in costly repairs and lost time. Reserved Instances transfer responsibility for these support activities to Amazon EC2, leaving you free to focus on your business. Reserved Instances allow you to avoid recurring costs by turning off instances when you are not using them. In the event of a hardware issue, you can re-launch your instance immediately without additional costs.
The chart below shows a comparison between the estimated annual costs of doing it yourself, Heavy Utilization Reserved Instances and On-Demand Instances for a customer running 35 m1.small and 10 m1.large Linux/UNIX instances at steady state for 3 years.
Annual Cost Comparison (100% utilization) |
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Do-It-Yourself |
EC2 On-Demand |
EC2 Reserved (1 Year Term) |
EC2 Reserved (3 Year Term) |
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| Usage Costs | - | $ 157,680 | $ 75,411 | $ 48,123 |
| Server Hardware | $ 20,129 | - | - | - |
| Network Hardware | $ 4,026 | - | - | - |
| Hardware Maintenance | $ 28,986 | - | - | - |
| Operating System | $ – | - | - | - |
| Facility Expense | $ 131,382 | - | - | - |
| Remote Hands Support | $ 1,014 | - | - | - |
| Data Transfer Costs | $ 10,071 | $ 6,138 | $ 6,138 | $ 6,138 |
| TOTAL COST | $ 195,608.00 | $ 163,818.00 | $ 81,550.00 | $ 54,263.00 |
For information, tools, and resources to compare the costs of Amazon Web Services with IT infrastructure alternatives please visit the AWS Economics Center.
How Billing Works
Customers using both Reserved and On-Demand Instances will have Reserved Instance rates applied first to minimize costs. With Light and Medium Utilization Reserved Instances, if the number of running instances each hour is less than or equal to the number of applicable Reserved Instances you have, all running instances will be charged at the Reserved Instance hourly rate. With Heavy Utilization Reserved Instances, you pay the low hourly usage fee for every hour in your Reserved Instance term (which means you’re charged the hourly fee regardless of whether any usage has occurred during an hour). When your total quantity of running instances during a given hour exceeds the number of applicable Reserved Instances you own, you will be charged the On-Demand rate.
For example, if you own 3 Medium Utilization Reserved Instances with the same instance type and Availability Zone, the billing system checks each hour to see how many total instances you have running that match those parameters. If it is 3 or less, you will be charged the Medium Utilization Reserved Instance Rate for each instance running that hour. If more than 3 are running, you will be charged the On-Demand rate for the additional instances.
If you purchase a Reserved Instance for an Availability Zone where you have a running instance, the lower hourly charge will automatically be applied to that instance moving forward with no need to restart.
How to Purchase Reserved Instances
Reserved Instances can be purchased using the AWS Management Console, Elasticfox or API tools.
AWS Management Console:
- Log in to the AWS Management Console, click the “Amazon EC2” tab & click “Instances” in the navigation pane
- Click the “Reserved Instances” button and select “Purchase Reserved Instances”
- Select your Reserved Instance type, platform, instance type, availability zone and term length
- Adjust the quantity of instances to purchase
- Confirm your purchase
Important Notes about Purchases:
- Reserved Instance Type, Platform, Instance Type, Availability Zone, and term length must be chosen at purchase, and cannot be changed later.
- If you are purchasing a Reserved Instance and would like your capacity guarantee to apply to Amazon VPC, please be sure to select an option with “Amazon VPC” as part of your “Platform” when purchasing a Reserved Instance through the AWS Management console.
- You can purchase up to 20 Reserved Instances per Availability Zone each month. If you need additional Reserved Instances, complete the form found here.
- The one-time fee is non-refundable.
- Reserved Instances cannot currently be used with instances running Red Hat Enterprise Linux, instances running IBM and instances running paid AMI.
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