Lower Pricing for Amazon EC2 Reserved Instances

Our customers are putting the Amazon EC2 Reserved Instances to use in many different ways. Here are some of the usage patterns that they've told us about:

• Steady State Usage - These customers have applications which require a fixed number of servers to be available at all times. Reserved Instances are advantageous for customers who are currently using their own hardware or who are using On-Demand instances full-time.
• Low to Medium Annual Utilization - These customers have applications which run less than 100% of the time. The breakeven point can be calculated based on anticipated instance usage at the effective hourly rate. Reserved Instances offer a cost savings over On-Demand instances even at relatively low utilization rates.
• Variable Usage - These customers have applications with unpredictable or fluctuating usage patterns. They can use a combination of Reserved and On-Demand instances to minimize their net costs. This is especially valuable when EC2 instances are frequently launched and then terminated—we minimize costs by always charging the lowest applicable price for each instance.
• Standby Capacity - These customers use Reserved Instances as a reliable source of standby capacity with availability at a moment's notice. The Reserved Instances are an integral part of their disaster recovery plan.

Given the many ways that our customers have already put them to use, I am happy to tell you that we've lowered the prices for newly purchased Amazon EC2 Reserved Instances! On a three year term, you can now get an m1.small instance for an effectively hourly rate of just $0.043 per hour (4.3 cents). The new pricing is now in effect.

Here are the new US prices (the instance prices for the EU have also been reduced):

Three Year Term
Instance Type	Instance Price	Hourly Charge	Effective Hourly Rate*
m1.xlarge	$2800.00	$0.24	$0.347
m1.large	$1400.00	$0.12	$0.174
m1.small	$350.00	$0.03	$0.043
c1.xlarge	$2800.00	$0.24	$0.347
c1.medium	$700.00	$0.06	$0.087

One Year Term
Instance Type	Instance Price	Hourly Charge	Effective Hourly Rate*
m1.xlarge	$1820.00	$0.24	$0.448
m1.large	$910.00	$0.12	$0.224
m1.small	$227.50	$0.03	$0.056
c1.xlarge	$1820.00	$0.24	$0.448
c1.medium	$455.00	$0.06	$0.112

You can purchase Reserved Instances from the AWS Management Console:

Or through ElasticFox:

-- Jeff;

* - The Effective Hourly Rate is computed based on full-time (24x7) usage.

Comments

[Max]

It's surprising that the "W" word is completely absent from this post, particularly after the comments you got on your initial post about reserved instances back in March:

http://aws.typepad.com/aws/2009/03/announcing-ec2-reserved-instances.html

Is it safe to assume that Amazon will still be selling Windows EC2 instances this time next year?

[Ismael Juma]

Hi,

A 30% discount is always appreciated. :) We were about to purchase a few reserved instances this week, but luckily that got delayed by a couple of weeks.

Looking into the future, I think it would be useful to be able to purchase reserved instances for 1 and/or 3 months. Some high-quality hosting companies provide dedicated servers on a monthly or quarterly basis (with better prices than on demand Amazon EC2), so I believe there's a gap to be filled there.

Best,
Ismael

[Dan]

Unfortunate for only newly purchased instances since we just bought a batch about a week ago... Honestly it makes me think buying 3 year plans is a bad idea, if you buy one year you can switch to the price reduces that will occur on EC2 every once in awhile, if you purchase 3 year instances you get screwed... Something to consider when you force a long term commitment, but then have more short term pricing changes.

[Dan Grossman]

I just bought another reserved instance last week and more last month. Disappointing to find the price dropped but I'm locked into a higher one.

[Kevin]

Is this the AT&T locked in pricing model?

[Rob]

Can you just tell us is there any indication of a Windows version soon. This AWS refusal to say anything about future work is really an obstacle to planning to run an operation on EC2

[Jacob L E Blain Christen]

I am still a bit new the the AWS so forgive me if this is answerable elsewhere: the instance type (m1.large, etc) can be selected in the purchase path but the AMI cannot be specified, am I to assume that the AMIs for reserved instances are pre-chosen? If so, what are the identifiers so that I may know more about them prior to purchase?

[Dan Grossman]

Jacob:

If you reserve an m1.large instance, then the m1.large instance you run for the most hours each month will be billed at the reserved rate.

It can be any m1.large instance, it can run any AMI, it can even have been started before you bought the reserved instance.

Amazon automatically figures out which instances can match what you have reserved, and picks the ones that would save you the most money to apply the lower pricing to.

You don't lose any of the flexibility of EC2 by reserving instances, you are just getting a discount on the hourly fees in return for committing to an upfront payment.

[Emmanuel Marchal]

The new pricing is nice as it makes the break-even for 1-y reserved vs on-demand at 5 months (used to be 7 months). The 3 years reserved break-even remains at 13 months so no change here. But it's always good to know that a 3-y reserved pays back after 13 months (note: these numbers are assuming 100% utilization, which might not be the case for everyone).

[Sree]

I just got couple of reserved instance last week before announcing the new plan, is there a way to apply discounts ??

[Vivek Puri]

I didnt really get the terms here. What is m1.xlarge, ...... as compared to what is listed in the pricing section here: http://aws.amazon.com/ec2/