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Amazon Prices Drop Again!

This week, Amazon Web Services (AWS) announced its 61st Price Reduction, and it was all about Reserved Instances (RIs). Simply put, RIs enable AWS users to receive a discount on their compute costs by making a commitment to pay for a certain amount of EC2 usage.


Here are the five things you need to know about this latest announcement:

  1. example blogThis price reduction applies to current generation instance types, which include C4, M4, R4, I3, P2, X1, and T2.
  2. There is a new, 3 Year No Upfront Standard RI option. Previously, only Convertible RIs were available as 3 Year No Upfronts.
  3. No Upfront 1 Year Standard and 3 Year Convertible RIs now cost as much as 17% less than they previously did, with variation by instance type, operating system, and region.
  4. 3 Year Convertible RIs are now up to 21% lower cost. Convertible RIs provide you with greater flexibility and room for optimization, because you can change the instance family (along with other parameters) at any time.
  5. M4 Linux Instances are now up to 7% cheaper.

Taking a look at the areas where AWS reduced prices the most, the changes are mainly in the area of No Upfronts. Likely, this is to compete with Google’s recent announcement of Committed Use Discounts, which look and feel a lot like Reserved Instances, although they do not offer any upfront payments. In our experience, No Upfront RIs have been the least popular of the RI purchasing options, with All Upfronts or Partial Upfronts being much more attractive. But maybe these new price drops will change those tides? It remains to be seen.

RIs may seem overwhelming, but they don’t have to be. Learn how CloudHealth can help you take advantage of RIs.