Issue
Our organization has many EC2 on-demand instances. We never looked at the reserved instance pricing because we thought we had to pay up-front. But I see that now there are reserved instance with no up-front costs, but monthly.
This looks like what we need to keep costs down, but I am unclear as to how the reserved instance pricing is applied.
For example, we have 10 t3.medium ec2 instance. Let's say that there are 6 always running 24/7, but the other 4 are not running 24/7, they are turned off when not in use.
If I buy a reserved instance for t3.medium, how does AWS know to apply it to the instances running 24/7 and not part time?
Solution
For example, we have 10 t3.medium ec2 instance. Let's say that there are 6 always running 24/7, but the other 4 are not running 24/7, they are turned off when not in use.
If I buy a reserved instance for t3.medium, how does AWS know to apply it to the instances running 24/7 and not part time?
Amazon doesn't apply reserved pricing to a specific instance at all. It basically just applies reserved pricing to your bill. It's like a discount at the time your bill is processed. If you have reserved pricing for N instances, and you have at least N instances running 24/7 reflected in your bill, then the reserved pricing gets applied to those N instances.
Amazon doesn't really care if you are running a single specific instance 24/7, or deleting and recreating instances once a minute. In the end it's just the total number of seconds you have a specific type of instance running each month that they care about, and bill you for.
Be aware that when you setup instance reservations it is actually a capacity reservation. You are telling Amazon you are committing to running this type of instance 24/7 for either 1 year or 3 years. By letting Amazon know this, it helps with their capacity planning, and in return they give you a cost discount. But it also means that they are going to charge you for that reserved capacity even if you don't actually have that instance running 24/7.
Answered By - Mark B Answer Checked By - Pedro (WPSolving Volunteer)