What is the difference between Standard and Convertible Reserved EC2 Instances ?
Should you go for Standard and Convertible Reserved Instances ?
Why is Convertible Reserved Instance a better choice in most cases !
We will try to answer these questions next?
Purchasing Reserved Instance in AWS is the most common approach of cost optimization we have seen across our customers. But more often than not, we have seen them getting locked in and not able to do any other usage level optimization due to this. Let's see how they get trapped.
The first choice in purchasing Reserved Instance in the Standard RI. Rightly so, as it provides the highest discount (up to 72%). Imagine the urge of cutting your bill to 1/3rd!
However, the standard RI locks you into a specific region and an instance family. So, if you have purchased a C5 series compute optimized AWS EC2 in Mumbai region, your only option after purchase is to move within family, which is in step of roughly doubling the size or cutting it down by half.
💡Unfortunately, usage level optimizations are more complex than just cutting the size by half, since rarely teams deploy double the size of their required capacity. A few scenarios could be like this -
✅ A compute optimized instance is deployed for a workload which is memory heavy (hence can benefit from memory optimized instance) or vice versa
✅ A dedicated capacity instance deployed for a workload which is seasonal and can benefit from burstable instances
✅ A workload that is CPU architecture independent and could benefit from ARM/Graviton based instance families
👆 Identifying usage level optimization requires close understanding of the underlying workload usage patterns and a deep understanding of different cloud offerings. With usage level optimization, the infrastructure cost can by cut down by 50% on an average. Now pair this with the benefit of RI, and you get to run your workload on the least cost point. However, engineering teams often miss this (part due to lack of specialized skills and part in lack of dedicated efforts in doing this) and purchases RI right away (in hope of cutting down whatever bill they pay at the moment). Result - once purchased, they are locked in that price and loose the flexibility to do usage level optimization further.
❓Do I have any other option? Yes. Convertible RI. While Convertible RI gives less discount than Standard RI, it is still significant (up to 66%). On the top, it allows to move across instance families. So, now you can tailor fit a specific instance family to your workload that utilizes the best of the available capacity, giving you better ROI on the money you pay.
💡Remember: with any Reserved Instance, you still commit to pay for the entire capacity or its equivalent. So, while you need to continue paying the same $$ amount in the bill with convertible RI, you can exchange it with additional capacity of rightsized instance, which can help run more workload than previously possible.
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