The Ultimate Guide to AWS Reserved Instances, Part 1: Planning and Analysis
It’s easy get caught up in the complexity of planning your first RI purchase — the sheer number of options at your disposal can be overwhelming at first blush! When planning your first purchase, you should take care to group like instances and evaluate costs by group.
Step 1: Group Similar Amazon EC2 Instances
To effectively manage RI purchasing at scale, you should start by grouping instances by one or more criteria, such as environment, application type, operating system (OS), or instance family. One popular approach is to group instances by their functional purpose (Production, Development, etc). Or better yet, start by analyzing just one instance family, like all of your r4 instances or in one Region. Another approach is to consider analyzing by OS (Windows, Linux, etc), since AWS charges different costs and offers different features based on the OS. Typically I see customers going with their biggest (and most expensive) grouping first.
Step 2: Evaluate Instance Groups
After breaking out your infrastructure into functional groups, you should determine the most cost-effective use of RIs by identifying which groups have the biggest impact on your total AWS costs. RIs are best suited for “always-on” infrastructure, so you may choose to exclude infrastructure groups that are on less than 65% of the time.
Step 3: Determine Your Reserved Instance Purchase Strategy
What’s your plan for this upcoming RI buy? Will you be basing the purchase on a set budget (e.g., $50,000) or on a projected coverage rate (e.g., 70% of my total running instance hours in a month should be covered by reservations)? Both are valid approaches! You also need to decide how often you will be making your purchases, is it monthly, quarterly, or continuously? Best practice is to purchase continuously, as needed. Lastly, will you be making delegated or centralized purchases? Because Reservations will have affinity to the account in which they were purchased, it’s an important consideration. Best practice is typically to purchase from the consolidated master account.
Step 4: Understand the Business Context of Your Reserved Instance Buy
Every Reservation actually has eight different features that require a decision point from you. To help you make good decisions around location, scope, class, type, OS, (for background on all these terms, check out this blog post: Convertible or Standard class RIs) consider the following questions, on a group by group basis:
- What percentage of instances within this group do you reasonably expect will still be running 1 or 3 years from now?
- Will the instances in this group remain within their current region?
- Am I likely to switch the instance type family (e.g. m4 to C5) for instances in this group?
- Am I likely to switch operating systems over the next 1 or 3 years?
- Do we need capacity assurance for any of our instances?
- How much capital can we commit to this buy right now? What is my budget?
Answering these questions will help you determine which RI type, scope, and class you should be purchasing for this group of instances.
Next step, Rightsizing Your Infrastructure!
This critical but often overlooked step when making an RI purchase can have a large impact on your bottom line.
Part 2: Rightsizing Your Infrastructure!
To learn more about how you can cut down your AWS spend with Reserved Instances, check out The Ultimate Guide to Amazon EC2 Reserved Instances eBook!
Originally published at www.cloudhealthtech.com.
