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 24/7 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 24/7 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.