What’s Happening to Standard RIs?
When it comes to AWS discount plans, management approaches vary greatly.
The often overlooked (Standard Reserved Instance) SRI has a lot to offer on further review. The deeper discount it offers has always been the obvious appeal, and while many are put off by its rigidity, the ability to buy and sell them on the secondary marketplace, gives it a greater appealing edge.
However, of late there is a lot of talk within AWS circles about the continued use of SRIs and if and how they can continue to be traded on the secondary EC2 RI Marketplace. With many wondering whether the heyday of the SRI has met its end, I’ll take the opportunity to put some facts on the ground and minimize all the surrounding confusion and concern. Fortunately, Zesty is geared to lead its customers through this complex and murky situation and onto a firmer footing. But I’ll get to that later, let’s start with what’s happening.
Limitations on Discounted RIs
According to AWS’s most recent update to its service terms, account holders can no longer sell Discounted SRIs on the EC2 RI marketplace. These are SRIs that were purchased under enterprise agreements with AWS, such as an Enterprise Discount Plan (EDP) or a Volume Discount.
What is an EDP? Organizations with hundreds of thousands of dollars in spend on AWS are typically eligible for an enterprise-wide discount – or EDP. Volume discounts are also available and granted once you purchase above $500k worth of Reserved Instance from AWS. Discounted RIs can usually be identified in the CUR (Cost and Usage Report) with its own line item.
AWS customers are no longer able to sell any of their discounted RIs on the secondary marketplace without prior approval. Over the past months, EDP holders received an email from AWS informing them of this update.
“We have identified that you may have listed or sold EC2 Reserved Instances (“RIs”) that received a discount (RI Volume Discount or others) on the Amazon EC2 Reserved Instance Marketplace. AWS does not permit the resale of RIs obtained through a discount program under Section 5.5 of our AWS Service Terms and so, starting January 15, 2024, AWS may block all sales of discounted RIs on the RI Marketplace. However, as a sign of goodwill, until January 15, 2024, we will allow you to list discounted RIs on EC2 RI Marketplace, as long as such discounted RIs were bought before 1-Oct-2023.”
As a leader in the discount management market, at Zesty our R&D and Customer Success teams have defined the best path for each customer to overcome these recent changes.
So Where Does This Leave You? Alternatives to SRIs
For those with no AWS discount programs, there’s nothing to worry about as it’s a case of business as usual. For those with AWS Discount Plans how best to move forward really depends on your application’s usage behavior and how much workloads fluctuate over time. Let’s consider these three main scenarios:
Consider using a mix of AWS Savings Plans (SPs) and 1-year & 3-Year Convertible Reserved Instances (CRIs) to save money while keeping things flexible. SPs give you discounts up to 72% and are great for the steady, predictable parts of your work, like running a bunch of m6.2xlarge instances for regular operations. This keeps your costs down consistently.
On the other hand, CRIs are awesome for the more dynamic parts of your workload. They’re adaptable, allowing changes in instance types and regions, a crucial consideration for evolving needs. Plus, unlike SPs, they also let you tweak the daily rate at which they’re used, letting you scale your computing resources — up or down without extra costs, but with some degree of complexity.
You may also want to consider keeping a portion of SRIs that have no more than 12 months or less remaining of new generation EC2 instances. These are good to be used for workloads that are experiencing a higher-than-normal, but relatively stable volume.
So in short, consider SPs and SRIs for the relatively stable workload volume, and CRIs for the flexible, more volatile workloads.
If your AWS bill is below the EDP threshold it may be still in your interest to keep your SRIs and continue to enjoy the bigger savings and the flexibility afforded by the RI marketplace.
I recommend keeping SRIs with a blend of CRIs or SPs to cover the bulk of the workload, SRIs will continue to deliver great savings for smaller and steady tasks that don’t have other discounts associated with them.
Periodic or Volatile workloads
For instances that go through regular ups and downs, it’s super important to figure out the right mix of AWS discount plans. While Savings Plans will give you big discounts, there’s a catch – you commit to a fixed dollar amount per hour, even if your needs change. So during slow times, you might end up paying more than you need to.
On the flip side, (CRIs), may give you the flexibility you need to tweak the daily usage rate to match your changing workload, which is perfect for those unpredictable job cycles. Occasionally, it might be in your interest to take advantage of highly reduced, short-term SRIs that appear on the marketplace. With the right terms, you can pick up an SRIs that gives a substantial discount for just the duration of your workload’s peak period.
A smart mix means you get some steady savings with Savings Plans, and deeper savings with SRIs, but the majority of your workload stays flexible and budget-friendly with CRIs. Perfect for handling the ups and downs of your application’s unpredictable needs.
The Flexibility is in the Blend
At Zesty, we’ve been supporting our customers for a long time with a blend of discounts that not only provides optimal coverage, it’s a meaningful hedge against the risk that normally accompanies these long-term discounts. We have done this successfully due to our unique methodology which includes the following;
- Proprietary ML Algorithm: At the core of our approach is a cutting-edge machine learning algorithm. This algorithm monitors discount allocations against how they are getting used and enables the rapid response to adjust if there is a growing gap. Our customers get the most out of their discount plans because Zesty’s solution caters to the dynamic nature of their operations.
- Savings Guarantee: As an additional layer of assurance, we provide a straightforward guarantee, where if at the end of the month, you have a sum total of discount plans that were purchased and not used, you will be reimbursed. This guarantee takes no effort to claim and adds great peace of mind.
- Expert Customer Support: Our customer support team is equipped with an in-depth understanding of how blended discount management should work to get the best possible savings. Available around the clock, our dedicated support ensures that any queries or concerns are addressed promptly. Whether you need assistance in optimizing your discounts or have questions about your coverage, our team is here to provide the support you need.
At Zesty, our commitment extends beyond just offering discounts, we strive to help our customers figure out the right mix of discounts that would work best for the workload environment. Reach out to us for support and make a confident decision in knowing how to manage these AWS discount plan changes.