New Amazon EC2 Reserved Instances

The good folks at Amazon have announced a new pricing scheme called a Reserved Instance to complement the On Demand instance. For a low one time payment, and about 20% of the instance hour cost, you can reserve capacity on 1 or 3 year terms. If you want to tie yourself into a long term contract but have a significantly reduced rate resulting in savings, this is the option for you.

For a standard instance, on a per use basis you will pay approximately $880 for one year. Using the new reserved instance, you will pay about $580 for a savings of around $300. These are just rough estimates, but a reserved instance saves you around 30-50% versus On Demand instances.  The longer the term, the better your savings.  You will save $1300 on a 3 year term deal against an on demand instance running for 3 years straight.





This is the announcement from directly fromAmazon about this service:

Dear AWS Customer,

We are excited today to introduce Reserved Instances, an additional pricing option for Amazon EC2 that gives you an option to make a low, one-time payment for an instance to reserve capacity and further reduce hourly usage charges. As with On-Demand Instances, you will still pay only for the compute capacity that you actually consume, and if and when you do not use an instance, you will not pay usage charges for it.

Customers of all sizes continue to enjoy our existing, pay-as-you-go pricing for On-Demand Instances, but some have told us that they are ready to reserve capacity in order to achieve even lower costs. 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 usage charge for that instance. After the one-time payment for an instance, that instance is reserved for you, and you have no further obligation; you may choose to run that instance for the discounted usage rate for the duration of your term, or if and when you do not use the instance, you will not pay usage charges on it.

Reserved Instances are complementary to existing Amazon EC2 On-Demand Instances and give businesses even more flexibility to reduce computing costs. Because Reserved Instances function identically to existing Amazon EC2 On-Demand Instances, you can now plan for an anticipated amount of capacity using Reserved Instances and then instantly spin up On-Demand Instances if your compute needs exceed you reserved capacity. Of course, you can also choose to handle all of your capacity needs using only On-Demand instances or only Reserved Instances — it’s entirely up to you. Reserved Instances are available in 1-year or 3-year terms.

We hope this additional pricing model is useful to you as you plan your compute needs. To learn more about Reserved Instances, go to aws.amazon.com/ec2.

Sincerely,

The Amazon Web Services Team