In the past couple of years, Amazon has been steadily increasing its computing powers to provide users with useful analytical and structural solutions. So, for each of these services, you have the scalability to expand the services to get as many resources as you need, and you can pay for only those resources every month. So, Reserve Instance or RI is a key feature which becomes highly beneficial for resource management.

What are AWS Reserved Instances?

The AWS Reserved Instances are best defined as cost-saving solutions which do not need any methodological optimization. When you business invests in RI, you will be making a big upfront investment. This investment is a wise move in the long run because it can help you save a lot of money. However, if you make errors along the way, you can be deprived of any returns on investments and you may even be forced to spend more instead.

At the same time, one should not be scared to deploy Reserved Instances because companies will obviously want ways to cut down on costs. This is why businesses are keen to become well-versed with this cost saving tool from Amazon. If you can use it the right way, you can enjoy huge cost savings. If used incorrectly, it may translate into huge losses too.

How Does Reserved Instance Work?

Reserved Instance is essentially a reservation of key resources and capacity for a period of 1-3 three years for a specific AZ or Availability Zone inside a region. In contrast to on-demand resources acquisition, when you have RI, you are committed to paying for every hour of that 1-3 years period. So, in return, the hourly rate is subsidized for you. So, when you buy Reserved Instance, you are not only saving costs but you are also reserving capacity which you are likely to need in that AZ. Most often RI is used in reference to EC2 but reservations are offered by Amazon also with regard to Content Delivery Network (CDN) and databases. The main idea behind choosing reservation of resources is to enjoy significantly lower rates as compared to on-demand rates.

What Are the Benefits of Using RI?

Perhaps the biggest advantage of using Reserved Instances is cost savings; this tool will let you reduce costs of resources which you are using already. This becomes possible as you make an upfront payment instead of paying on demand. You can choose from more than 2000 RIs and each has its break-even point. This is the point in which you have been able to get enough resources from the reserved capacity in order to compensate for the upfront payments you had made.

Another huge advantage of choosing to buy RI is because you can reserve the capacity in your preferred AZ. The instances in managed AWS are spread across multiple geographical locations. Every region will have multiple AZs which refer to special locations within the region. The Availability Zones inside the same region will be connected through low-latency links. Each has its cooling and power systems and runs independent of other AZs.

When you have reserved capacity for a specific AZ, it is very beneficial when your infrastructure makes use of auto-scaling and experiences traffic spikes very often.  For instance, when you run an app when most of the infrastructure in a certain AZ, you are likely to see huge spikes in its usage when the app becomes popular. The app typically auto scales to cater to the increase in demands. But, if there is no available resource capacity in that AZ, the app will not work. When you however have a RI in that AZ, capacity is reserved and the crisis does not happen.

Another key reason to get RI is to reserve capacity also in other regions for emergencies. This is needed when demands have exhausted capacity in a certain AZ. In case you have to shift because of some natural calamity from one zone to another, you will realize that others will also be moving to other zones and this will trigger demand increase in other zones. If you have a reserved capacity in the original zone, you would get a spot front of the line even if you shift. So, the best way to have some upfront investments even in other zones. Whether you use them or not is secondary; they are great insurance covers in case you have exhausted your capacity.

When a situation arises whereby you must change the AZ of your RI, you can do so easily by shifting the RI to another available AZ within that region. You can modify the network platform and instance size of the reservation to get another size of that instance type for no extra charge.

Using the RI is simple and when you assess the bill, the system will always apply RI prices to bring down the costs. You can even sell the RI in the RI marketplace when you are keen to bring about planned or unplanned changes.