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5 key Strategies to maximize Cloud Cost Savings with AWS Reserved Instance

5 key Strategies to maximize Cloud Cost Savings with AWS Reserved Instance

In the ever-evolving landscape of cloud computing, optimizing costs while maintaining efficiency is a priority for organizations. AWS Reserved Instances are not physical instances but rather a billing discount applied to the use of on-demand instances in an account. These on-demand instances must match certain attributes, such as instance type and region, in order to benefit from the billing discount.

AWS Reserved Instances (RIs) stand as a powerful tool for achieving substantial AWS cost savings when utilized effectively. Understanding the best practices and strategies to leverage RIs can significantly impact an organization’s AWS cost optimization strategy. Here are five key strategies to maximize AWS cost savings through strategic usage of AWS Reserved Instances:

  1. Strategic Reserved Instance Purchases

Strategic Reserved Instance (RI) purchases serve as a linchpin in effective cost management within cloud environments. Let’s find out how it helps in optimizing cloud costs:

  • Analyzing Historical Usage Patterns: Examining past usage trends is fundamental in making strategic Reserved Instance (RI) purchases. Identifying instances with consistent runtime ensures optimal utilization of RIs, aligning them with the organization’s operational needs.
  • Utilizing AWS Cost Explorer or Third-Party Tools: Leveraging tools such as AWS Cost Explorer or third-party solutions is instrumental in spotting RI utilization prospects. These tools provide insights based on instance types, regions, and term lengths, guiding informed decisions on where to allocate Reserved Instances for maximum cost efficiency.
  • Consideration of Convertible RIs: Considering convertible RIs offers a forward-thinking approach. This flexibility allows modifications to instance attributes, aligning them more precisely with evolving requirements. The adaptability of convertible RIs ensures that the organization can adjust to changing cloud demands, optimizing resource utilization over time for enhanced cost-effectiveness.


  1. Adaptability to Changing Usage Patterns

AWS RIs can be adapted to changing usage patterns. Here’s how you can leverage AWS’s flexibility:

  • Modifying AWS RIs for Shifting Usage Patterns: The adaptability of AWS Reserved Instances is key to aligning with changing usage demands. Organizations can leverage AWS’s flexibility by modifying or exchanging RIs to accommodate shifts in usage requirements. This agility allows for seamless adjustments, optimizing RI utilization as per evolving workload demands.
  • Automation with AWS Instance Scheduler: Implementing tools like AWS Instance Scheduler streamlines the process of managing instances in line with usage patterns. This automation facilitates the scheduled shutdown of instances during non-peak hours.
  1. Utilizing RIs with Autoscaling

Optimize RIs with autoscaling groups to match instances with varying workloads. This is how you configure the autoscaling groups:

  • RI Optimization with Autoscaling Groups: Integrating AWS Reserved Instances (RIs) with autoscaling groups proves instrumental in adapting to fluctuating workloads. This integration allows for the seamless adjustment of instances to match varying workload demands, optimizing resource utilization.
  • Configuring Autoscaling Groups for RI Priority: Configuring autoscaling groups to prioritize RI usage is key. Aligning scaling policies with the instance types covered by RIs ensures that these reserved resources are utilized before on-demand instances.
  • Maximizing AWS Cost Savings: The dynamic adjustment enabled by RI-integrated autoscaling groups ensures that RIs take precedence over on-demand instances. This strategic utilization maximizes AWS cost savings by ensuring that reserved resources are efficiently utilized.
  1. Blend RIs with On-Demand Instances

Below are the steps to employ a blend of RIs and On-Demand instances to achieve a cost-efficient balance:

  • Strategic Blend of RIs and On-Demand Instances: Achieving a cost-efficient balance involves strategically combining Reserved Instances (RIs) with On-Demand instances. This hybrid approach allows organizations to optimize AWS costs while addressing varying workload needs.
  • Flexibility with On-Demand or Spot Instances: Unpredictable workloads or instances unsuitable for the RI model benefit from the flexibility of On-Demand or Spot instances. Employing these models ensures adaptability to fluctuating demands, avoiding underutilization of RIs.
  • Utilizing AWS Cost Explorer’s RI Coverage Report: Leveraging tools like AWS Cost Explorer’s RI Coverage report is crucial. This resource helps identify areas where RIs are underutilized or where optimizing RI allocation could yield higher cost efficiency and maximize AWS cost savings.
  1. Continuous Monitoring and Optimization

Regularly monitor RI usage and optimize where necessary. Here is how you can maximize monitoring to your advantage

  • Routine RI Usage Monitoring: Continuous monitoring of Reserved Instance (RI) usage is crucial for effective cloud cost tracking and management. Regularly track and assess RI utilization to ensure resources align with actual workload demands, optimizing cost efficiency.
  • Utilizing Third-Party Solutions: Utilizing AWS Tools and Third-Party Solutions: Leverage tools such as AWS Cost Explorer, AWS Trusted Advisor, or third-party cloud cost optimization solutions. These tools offer comprehensive insights into RI utilization, identifying underutilized RIs or areas for adjustment to maximize cost-effectiveness.
  • Periodic Re-evaluation of RI Purchases: Periodically reassess RI purchases to match evolving workload patterns. By revisiting and adjusting RI purchases in line with shifting workload demands, organizations ensure continuous optimization and sustained AWS cost savings in their cloud expenditure strategies.

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Leveraging AWS Reserved Instances strategically empowers organizations to drive substantial AWS cost savings while maintaining performance and flexibility. By employing these five strategies, organizations can not only optimize their AWS costs but also ensure efficient resource utilization in line with their evolving business needs. As cloud environments evolve, staying agile in RI utilization remains key to maximizing cost efficiencies and reaping the benefits of AWS cloud services.