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AWS Reserved Instances discounted, but overhead remains

Amazon rolls out a new Scheduled Reserved Instances pricing discount, but IT pros aren't sure it is worth the management hassle.

New AWS Reserved Instances pricing was rolled out last week, but IT pros question whether the cost savings are...

worth the additional management overhead.

Amazon laid out the new AWS Scheduled Reserved Instances (RIs) pricing scheme -- 5% to 10% lower than On-Demand Instance prices. It also offered up potential uses for the instances, such as a telecom performing bill calculations at the beginning of a month, or a 3D art studio that performs rendering operations after hours. For users with recurrent workloads, the Scheduled Reserved Instances can provide a more dependable option than Spot Instances, which can't be scheduled and won't necessarily run for the entire duration of the requested period.

However, IT pros aren't convinced those savings offer enough value over Spot Instance discounts of 50% to 90%, compared to On-Demand prices -- especially since Scheduled Reserved Instances cannot yet be automated through AWS offerings, such as Lambda, Auto Scaling or CloudFormation. Amazon claimed to be working on this.

"There are a few use cases here, but I wouldn't say it's a big opportunity," said Kris Bliesner, CTO and co-founder of 2nd Watch, a managed public cloud provider and AWS partner. "People that run batch jobs and other regular 'timed' events are likely already using Spot [Instances], which is typically closer to a standard RI price reduction of 25% versus what they are advertising for these."

The new AWS Scheduled Reserved Instances also add another layer of complexity to RI purchase planning and management, said Glenn Grant, CEO of G2 Technology Group.

"I'd assume there is a savings to be had here," but the math is now so complex it's difficult to evaluate "if it is truly worth it to make a commitment to an instance size versus having the flexibility of tightly managing On-Demand Instances," he said.

Amazon's new pricing tier does seem more customer-centric, offering more ways to save on cost. It would allow customers to predict their needs to help Amazon ensure the capacity is available when needed, said Patrick McClory, director of automation and DevOps for Datapipe Inc., a provider of managed hosting services for AWS.

However, he criticized how complicated the cost structure has become within AWS.

"I love the flexibility, but the added complexity makes it hard for an AWS newcomer to really know how to optimize their spend without seeking outside help," McClory said.

Moreover, since last October, users can request Amazon Elastic Compute Cloud (EC2) Spot Instances to run continuously -- for up to six hours -- at a flat rate that saves up to 50%, compared to On-Demand prices. This can help "reduce costs when running finite duration tasks, such as batch processing, encoding and rendering, modeling and analysis, and continuous integration jobs," according to Amazon's Spot Instance website.

Regular AWS Reserved Instances, contracted for a one- or three- year period, can offer up to 75% savings, compared to the On-Demand price, according to the AWS Reserved Instance website. A more typical rate, according to IT pros, is around 20% to 25%. But while Scheduled Reserved Instances offer more flexibility than regular AWS Reserved Instances, they must be run for 365 days at a minimum utilization of 1,200 hours, which may be a better fit for a one-year regular Reserved Instance term.

Reserved Instances have always been the bane of all AWS customers -- that's why there are so many third-party companies trying to help you manage [them].
Theodore Kimsenior director of software as a service operations at Jobvite Inc.

As it is, AWS Reserved Instances can be difficult to manage, according to Theodore Kim, senior director of software as a service operations for Jobvite Inc., a talent acquisition software maker.

"Reserved Instances have always been the bane of all AWS customers -- that's why there are so many third-party companies trying to help you manage [them]," Kim said.

Regular Reserved Instance discounts can make a huge difference -- Jobvite typically saves 40% with EC2 costs versus On-Demand pricing -- but constant vigilance is required to utilize and manage RIs, Kim said.

Scheduled Reserved Instances might come in handy, he suggested, during peak hours when certain EC2 instance types can be difficult to come by. For example, a company with thousands of instances might find the 5% to 10% discount results in substantial enough savings to warrant the management overhead.

Beth Pariseau is senior news writer for SearchAWS. Write to her at bpariseau@techtarget.com or follow @PariseauTT on Twitter.  

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Are AWS Scheduled Reserved Instances worth the management overhead?
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Hi Beth, great article - we agree that the overhead is probably not worth it. After reading this, we mapped out a full look at whether scheduled reserved instances are a worthwhile way to save money: http://bit.ly/1nRqlR3

-Katy at ParkMyCloud
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Yes it is worth it if you are talking about long term workloads. (3-year RI's) with 50-65% discounts its a no brainer to buy RI's for those workloads. For short term workloads? I am not sure it's really worth it. But if you had a body that was not doing anything maybe you might just give them the task to find and buy workloads you can use from the marketplace on a monthly basis and try and pay 40cents on the dollar for those RI's for sale by other users... maybe that would be worth it.
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