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Discounted cloud compute capacity purchased with a one- or three-year commitment to reduce costs.
DESCRIPTION
Reserved instances provide significant discounts in exchange for a term commitment and, sometimes, specific instance attributes. They suit predictable, steady-state workloads with high utilization. AWS, Azure, and Google offer variants (Reserved Instances, Reservations, Committed Use Discounts) with differing flexibility and exchange options. Capacity reservations may be tied to specific regions or instance families. Proper forecasting and utilization monitoring are essential to realize savings and avoid underuse.
ALTERNATIVE DEFINITIONS
AWS
Reserved Instances provide a significant discount (up to 72%) compared to On-Demand pricing in exchange for a one-year or three-year commitment.
Quantifies typical discount and highlights commitment terms.
Microsoft Learn
Azure reservations help you save money by committing to one-year or three-year plans for virtual machine compute capacity.
Highlights reservation duration and scope for VM compute.
Google Cloud
Committed use discounts provide reduced prices in exchange for committing to a minimum usage level for resources for a one- or three-year term.
Defines minimum usage commitments as the mechanism for discounts.
RELATED TERMS
Committed Use Discount Capacity Reservation Cost Optimization Cloud Pricing Utilization Workload Forecasting Enterprise Agreements
COMPETING TERMS
On-Demand Instance Spot Instances Savings Plans
KNOWLEDGE AREAS
TARGET AUDIENCE
Cloud Architect DevOps Engineer IT Manager Chief Technology Officer Solution Architect
EXTERNAL SOURCES
- Wikipedia - Reserved Instance
- AWS - Reserved Instances pricing overview
- Microsoft - Azure reservations guide
- Google Cloud - GCP committed use docs
TOP QUESTIONS
When should Reserved Instance be used?
Use for steady-state workloads with predictable utilization where long-term commitments reduce costs. Ideal for production servers, databases, and always-on services.
Category: Requirements
What are risks with Reserved Instance?
Underutilization wastes money. Workload shifts, migration, or deprecation can leave commitments unused. Mitigate with forecasting and flexible reservations.
Category: Risks
How do Reserved Instance savings compare to Spot and On-Demand?
Reserved beats On-Demand on price with predictability; Spot can be cheaper but interruptible. Choose based on workload tolerance and utilization.
Category: Alternatives
What mistakes occur with Reserved Instance planning?
Overcommitting capacity, ignoring regional or instance family constraints, and failing to monitor utilization lead to poor savings realization.
Category: Mistakes
How to manage Reserved Instance utilization?
Use tagging, cost tools, and dashboards to track coverage. Adjust workloads and reservations; consider convertible or flexible options where available.
Category: Management
Are Reserved Instance transferable or exchangeable?
AWS offers convertible RIs; Azure supports exchanges and refunds in some cases; GCP commitments are less flexible. Check provider rules.
Category: Opinion
What’s a hot topic around Reserved Instance?
Savings Plans and flexible commitments provide similar discounts with more agility, changing how teams plan long-term capacity.
Category: Topic
How does forecasting impact Reserved Instance?
Accurate demand forecasting maximizes savings and reduces underuse. Align reservations with expected growth and regional capacity plans.
Category: Example
Where to start learning about Reserved Instance?
Read provider pricing docs, explore cost calculators, and review case studies on RI coverage and Savings Plan strategies.
Category: Topic