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AWS Reserved Instance pricing changes get mixed reviews

After AWS said its Reserved Instance pricing would no longer be bound to utilization, cloud computing professionals grew ambivalent.

Amazon Web Services has overhauled its Reserved Instance pricing, which most customers took in stride, despite a minority that are unhappy with the changes.

Instead of being priced according to light, medium and heavy utilization, Reserved Instances will be priced according to how much of the Reserved Instance is paid for up front, which Amazon said will simplify the purchasing process.

Prices are now set in three categories: No Upfront, which means a higher effective hourly price than the other two categories; Partial Upfront, which balances up-front costs with ongoing hourly prices; and All Upfront, in which the customer pre-pays for the Reserved Instance over a one or three-year term and then does not pay anything per month, which carries the lowest effective hourly price.

Customers can still purchase utilization-based instances through Feb. 1, 2015.

Responses ran the gamut, from customers who expect to save more money to those who will evaluate other cloud service providers.

"We are in a continual process of improving our efficiency and improving our effectiveness with utilizing technology, making sure that we’re able to provide our service in a performant, stable and scalable manner, and in a cost-effective manner," said a director of DevOps for a software company based in the Southwest. "Up until recently, Amazon's pricing and discount structure was very conducive to those efforts and [the recent changes] kind of spoiled some of our plans, so we’re looking at other options to see if other providers would be able to provide more efficiency."

Customers that have carefully optimized their Elastic Compute Cloud infrastructure with utilization-based Reserved Instances "are not happy," said Kris Bliesner, CTO of 2nd Watch, a cloud computing consultant group based in Liberty Lake, Wash.  "Less choice makes it harder for them to optimize individual spend components."

These are typically smaller, price-sensitive customers rather than enterprise businesses, Bliesner said.

"This is designed to simplify pricing, which has been a pain point for broader adoption," Bliesner added. "I think that resonates well with folks who are less price sensitive and looking for value and simplification."

Customers at the high end of the spending spectrum should benefit most, said Mark Szynaka, a cloud architect for CloudeBroker, based in New York.

"The full upfront charge ... saves approximately 63% over on-demand," Szynaka said.  This would be an additional 13% savings over the current heavy utilization price for a one-year reservation period.

"For one of my clients, who has deep pockets, they would welcome that option," Szynaka said. Meanwhile, cash-strapped startups may also want to acquire reserved instances with no money down, Szynaka said.

"This will allow small companies such as Bluebird to get some benefit from Reserved Instances without negatively affecting our cash flow," said Phil Jones, vice president at Bluebird. "I can see us taking this middle road as a way to enjoy a 30% discount over on-demand but without having to expend precious cash reserves."

There are also several other ways to optimize AWS infrastructure to save money, said Scott McKay, CTO for ZappRx, an online prescription management service startup based in Boston, Mass.

The pricing change would probably lead ZappRX to use on-demand instances for test-and-dev workloads which are not heavily utilized, McKay said. Customers can also cut costs by turning down servers and secondary services when they’re not being used.

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

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