AWS Announced Simplified Reserved Instances (no-upfront)

Simplifying the EC2 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 that so that you can decide how you would like to pay for your Reserved Instance throughout the term (in descending order of effective discount), and you can find these new options under the Offering settings when purchasing Reserved Instances:
  • 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.

For r3.4xlarge instance type (122GB RAM, 52 compute units (16 core x 3.25 unit)), the 1 year cost would be:
  • All Upfront: $6,507
  • Partial Upfront: $6,640 (+2%)
  • No Upfront: $7,707 (+18.4%)
  • On demand: $12,261 (+88.8%)
As you can see, only a little difference in Partial Upfront and All Upfront option. Assuming you would still need server for whole year, the best balance would be Partial Upfront or No Upfront, the latter being more interesting for companies who cannot afford upfront payments and need performance on the go.

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