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AWS Reserved Instance Pricing

The current large project I’m working on is going to be hosted on AWS and I was requested to do a cost estimate. Looking into it, it quickly became clear that reserved instances could potentially save quite a bit of cash but there was a catch (isn’t there always?).

There is an upfront cost for reserving the instance and in exchange you get a reduced hourly rate. After running the numbers one thing wasn’t clear too me, is the upfront cost credit towards running machines or a fee you never see again?

I immediately assumed the latter based on the numbers for one simple reason. If you use the ‘Light Reserved Instance’ with a 1 year reservation, have your machine running 247 the whole year it will cost your more than running the same instance as ‘on demand’. This was true for their m1.small, m3.medium, and m3.large which was the only ones I ran the numbers for.

I searched the internet and wasn’t able to find a solid answer to the question until I asked Amazon’s customer service directly.

Ultimately there probably is a price point where 1 year light reserved instances make sense, and if you’re looking too run 247 for the whole year you’ll want to do a heavy anyway for the most savings but it still surprised me.

I’ll probably do a project later using d3.js to get some direct hours run vs total cost for various instances. It’ll probably be a fun project.