Our RI Purchase Guidelines

I've talked about it a couple of times, but AWS's recommendation engine is free and borderline magic.

It's a part of AWS Cost Explorer and ingests your AWS usage data, and spits back reserved instance recommendations

At first glance it feels a little suspect that a vendor has a built in engine to help you get insight into how to save money, but Amazon is playing the long game. If you're use of AWS is more efficient (and you're committing to spend with them) you're more likely to stay a customer, and spend more in the long haul.

The Recommendation engine has a few parameters you can tweak. They default to the settings that will save you the most money (and have you commit to the longest term spend with Amazon), but that may not be the right fit for you.

For example our total workload fluctuates depending on new features that get released, performance improvements for our databases, etc., so we typically buy convertible instances so we have the option of changing instance types, size and OS if we need to.

As you click around in these options you'll notice the total percent savings flies around like a kite. Depending on the options you select your savings can go up and down quite a bit.

Paying upfront and standard vs. convertible can give you a 2-3% difference (based on what I've seen), but buying a 3 year RI instead of a 1 year doubles you're savings. That can be a big difference if you're willing to commit to the spend.

Now, three years is almost forever in Amazon. Keep in mind Amazon releases a new instance type or family about every year, so a 3 standard RI feels a little risky to me. Here are the guidelines we're trying out

• Buy mostly convertible (the exception is services that will not change)
• Stay below ~70% RI coverage (we have a couple efficiency projects in the works that will reduce our EC2 running hours)
• Distribute your spend commit

My next post will cover how we distribute our spend commit.