Simplifying the EC2 Reserved Instance Model | Hacker News Reader

Simplifying the EC2 Reserved Instance Model

aws.amazon.com

42 pointsajdecon22 comments

Pet peeve in case Jeff Barr (or another AWS person) reads this. I purchased multiple 3-year heavy utilization RIs just a few months before the price wars last year. The ROI on those went from "great" to "very modest" overnight. I know there is an RI Marketplace where I could try to sell them, but as the on-demand prices went down so far, I would not be likely to get a decent deal. It felt like the best customers, those who have committed for multiple years, were being left out in the cold. I will not be doing any long-term (over 1 year) RI purchases again unless they make it possible to participate in price drops.

That is the whole point. The price IS going to go down overt time. So by getting you to commit to a price Amazon can more accurately predict their growth and you get a fairly decent discount in trade. 1 year terms are much wiser IMHO because of the constant price lowering.

Agreed, 1 year is the sweet spot here. I didn't appreciate the opportunity cost of getting the 3-year RI, as much as the straw man "savings" against the current on-demand prices.

I've been buying 1-year reserved instances for about 3 years now. I think due to price cuts (which happen fairly regularly), this is economically the best way to go. Maybe someone has done a more rigorous analysis.

I also had this happen to me too, and I was pretty annoyed. On the bright side, with this announcement, if you can afford to buy the "All Upfront" instances, then at least when you want to resell them, you don't have to worry about the hourly rate dropping on their new announcements so the resale should be pretty easy.

They didn't hit any of my pain points.

The payment schemes weren't particularly complex/annoying. What is annoying is that when you purchase a RI you cannot just point at an existing VM and have the RI both bind to that but also select the right availability zone and location (e.g. 1A, 1B, 1C, 1D, East, West, Central, Europe, etc). I've had to go through the painful process of migration from 1B to 1C because I mistakenly purchased US-East-1B instead of US-East-1C.

Plus there is something to be said for Azure's "you can always upgrade it" model. RIs are great price wise, but Amazon won't let me buy e.g. a small RI and then pay the difference to upgrade the RI to a medium or large (even if they have to extend the RI to do so).

This is really the most welcome change (NOT listed in the blog):

> On February 2nd 2015, Light and Medium Utilization Reserved Instances will no longer be available for purchase.

Light and medium RIs were too complicated. It was also too hard to track your RI usage in the way you'd need to to manage those plans, it is just easier to do on demand pricing with a few heavy utilisation RIs.

> Amazon won't let me buy e.g. a small RI and then pay the difference to upgrade the RI to a medium or large

You kinda can - when you purchase RIs, you're really just purchasing a chunk of capacity ("Units" in EC2 parlance). You can reallocate your units into different RIs, so if you bought a c3.2xlarge and want to upgrade it to a 4x large, you'd just buy a second 2xlarge and then recombine your two 2xlarges into a 4xlarge. Or you could split a 32-unit 4xlarge into 4 8-unit 1x larges.

ie, 2x c3.xlarge (http://i.imgur.com/hPl2WNJ.png) recombine into 1x c3.2xlarge (http://i.imgur.com/KhthjYo.png)

Granted, you can't jump from a medium to a large; it only works within the same product class. But it does provide upgrade paths. It is bass-ackwards, though. And the fact that they sell "instances" rather than "units" but don't let you bind RIs to actual instances is confusing as all get-out.

thanks for the tip, I didnt know thats how it worked.

An important limitation to note is that while you can "just buy a second 2xlarge", you have to do it within the same hour:

"When combining Reserved Instances, the end dates of the Reserved Instances must have the same hour digits in 24-hour format"

Source: http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/ri-modify...

What you're saying is not really correct.

You cannot just "buy a second 2xlarge" and then recombine them into a 4xlarge. The 2xlarge reservations and pay attention here need to match on their purchase date and hour. I.e they have to be bought within the same clock hour on the same day.

If you reserved a 2xlarge at 2014-12-01T22:59:59Z, you couldn't even combine it with one bought at 2014-12-01T23:00:01Z. Yes Amazon is that picky about it. While you might be able to muscle that through a sales contact, it's not even available to customers on business level support, so anything more than a day apart and you're likely out of luck in any case.

(See: http://docs.aws.amazon.com/AWSEC2/latest/UserGuide/ri-modify..., particularly bullet point #6)

Ah, I didn't realize this. Wow, that's...restrictive. Thanks for the info.

This is great. I kept telling my developer colleagues that AWS EC2 could get more affordable as we scaled and bought reserved instances.

As a bootstrapped startup paying for a year or three years upfront is quite a bit of a burden, but I think this is great progress and will make that easier on us.

I also like Google Cloud's sustained use discounts because it is automatic. I'm not sure if AWS will ever do that, but since I'm such a huge fan of AWS, I'd love it. [1].

[1]: https://cloud.google.com/compute/pricing#sustained_use

I would also love to be able to move across instance families. Another reason not to commit for a long period of time. I'm willing to say "I'm committed to using x amount of AWS computing power over the next 3 years" but not if that will prevent me from using any of the new instance families that come out over that time frame.

Ah, but that's the whole point. Amazon wants to buy hardware and know that it's going to get used.

I certainly understand that Amazon's interests are different from mine, and they are going to make offerings that are good for them. But the best offers are win-win, and a 3-year RI doesn't meet that bar. It's a bad offer for the customer, but masquerades as a good offer. Not unique in the world of business, "buyer beware" and all that of course. It was my bad for not fully appreciating the lock in and avoiding it.

It's a bad offer for the customer

Not necessarily. Some people won't want to move between server families anyway. It's up to the customer to figure out if what Amazon is offering is good for them or not.

Still this is far less simple than Google's "sustained use" discounts, where price automatically drops when I have more constant use pattern. Here I still need to plan upfront, assume my future usage patterns. It seems easier, but in fact you need to make the same decisions as previously.

I also wonder what happens if I make "no upfront" reservation and don't use it? If nothing - why would I use on-demand, while I always can do reservation without upfront?

"No Upfront - You pay nothing upfront but commit to pay for the Reserved Instance over the course of the Reserved Instance term". Presumably, you'll be billed each month (for 12 months) whether you're using it or not. Of course, if you close your AWS account entirely, they'd have to come after you if they wanted to collect -- but if you're not planning to go out of business, then you shouldn't expect to be able to just drop the instance mid-year.

OK, then it would behave as the old heavy reservation.

Ah Jeff! I love how this guy actually write and simplifies the technologies.

This is one easy way for non-cloud users to pickup EC2 and use it as hosting services and demystify the price VS usage behind it.

Thank you -- this comment made my day!

Ah you are here Jeff! You da man, seriously I read most of your blogs, because I have been self-taught & I appreciate when people write good stuff to make you learn rather than just selling. :)! Kudos!

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