EC2 Reserved Instance Update – Convertible RIs and Regional Benefit

We launched EC2 Reserved Instances almost eight years ago. The model that we originated in 2009 provides you with two separate benefits: capacity reservations and a significant discount on the use of specific instances in an Availability Zone. Over time, based on customer feedback, we have refined the model and made additional options available including Scheduled Reserved Instances, the ability to Modify Reserved Instances Reservations, and the ability to buy and sell Reserved Instances (RIs) on the Reserved Instance Marketplace.

Today we are enhancing the Reserved Instance model once again. Here’s what we are launching:

Regional Benefit -Many customers have told us that the discount is more important than the capacity reservation, and that they would be willing to trade it for increased flexibility. Starting today, you can choose to waive the capacity reservation associated with Standard RI, run your instance in any AZ in the Region, and have your RI discount automatically applied.

Convertible Reserved Instances -Convertible RIs give you even more flexibility and offer a significant discount (typically 45% compared to On-Demand). They allow you to change the instance family and other parameters associated with a Reserved Instance at any time. For example, you can convert C3 RIs to C4 RIs to take advantage of a newer instance type, or convert C4 RIs to M4 RIs if your application turns out to need more memory. You can also use Convertible RIs to take advantage of EC2 price reductions over time.

Let’s take a closer look…

Regional Benefit
Reserved Instances (either Standard or Convertible) can now be set to automatically apply across all Availability Zones in a region. The regional benefit automatically applies your RIs to instances across all Availability Zones in a region, broadening the application of your RI discounts. When this benefit is used, capacity is not reserved since the selection of an Availability Zone is required to provide a capacity reservation. In dynamic environments where you frequently launch, use, and then terminate instances this new benefit will expand your options and reduce the amount of time you spend seeking optimal alignment between your RIs and your instances. In horizontally scaled architectures using instances launched via Auto Scaling and connected via Elastic Load Balancing, this new benefit can be of considerable value.

After you click on Purchase Reserved Instances in the AWS Management Console, clicking on Search will display RI’s that have this new benefit:

You can check Only show offerings that reserve capacity if you want to shop for RIs that apply to a single Availability Zone and also reserve capacity:

Convertible RIs
Perhaps you, like many of our customers, purchase RIs to benefit from the best pricing for their workloads. However, if you don’t have a good understanding of your long-term requirements you may be able to make use of our new Convertible RI. If your needs change, you simply exchange your Convertible Reserved Instances for other ones. You can change into Convertible RIs that have a new instance type, operating system, or tenancy without resetting the term. Also, there’s no fee for making an exchange and you can do so as often as you like.

When you make the exchange, you must acquire new RIs that are of equal or greater value than those you started with; in some cases you’ll need to make a true-up payment in order to balance the books. The exchange process is based on the list value of each Convertible RI; this value is simply the sum of all payments you’ll make over the remaining term of the original RI.

You can shop for a Convertible RI by making sure that the Offering Class to Convertible before clicking on Search:

The Convertible RIs offer capacity assurance, are typically priced at a 45% discount when compared to On-Demand, and are available for all current EC2 instance types on a three year term. All three payment options (No Upfront, Partial Upfront, and All Upfront) are available.

Available Now
All of the purchasing and exchange options that I described above can be accessed from the AWS Management Console, AWS Command Line Interface (AWS CLI), AWS Tools for Windows PowerShell, or the Reserved Instance APIs (DescribeReservedInstances, PurchaseReservedInstances, ModifyReservedInstances, and so forth).

Convertible RIs and the regional benefit are available in all public AWS Regions, excluding AWS GovCloud (US) and China (Beijing), which are coming soon.

— Jeff;