How to Maximise AWS EC2 Savings (57%) with Reserved Instances - Here’s How You Can Do It Yourself

Many companies rely on 1-year AWS Savings Plans to reduce cloud costs, believing they’re making a smart financial decision. With coverage reaching 90% or more of their workloads, they feel confident in their approach. However, they may be missing out on significantly greater savings.

Understanding AWS 1-Year Savings Plans

AWS offers two types of Savings Plans:

• Compute Savings Plans: Provide flexibility across instance families, sizes, and regions, offering discounts of 19%-28%.

• EC2 Instance Savings Plans: Offer higher discounts (33%-37%) but lock the commitment to a specific instance family and region.

While both options provide solid savings, companies are making a 1-year commitment and leaving a lot of money on the table.

The Real Savings Lie in 3-Year Commitments

The biggest cost reductions come from committing for three years. The highest discounts (around 57%) are available when businesses lock-in specific infrastructure needs for the long term.

However, who can confidently predict their infrastructure needs three years in advance? Will the same workloads, applications, and instance types still be relevant in three years?

This uncertainty makes many businesses hesitant to commit fully, even though the savings are substantial.

If you were willing to commit to AWS for 3 years, but wanted the flexibility to change instance families and regions, you could consider a 3-year Compute Savings Plan, but even that only gives you around 44%-48% savings, while locking you for 3 years.

What if there was a way to achieve the highest savings (57%), while having no lock in? That’s not possible, is it? Surely this is “too good to be true”?

Where to purchase Reserved Instances on the AWS Marketplace

Introducing the AWS RI Marketplace

The AWS RI Marketplace allows Reserved Instances (RIs) to be bought and sold, similar to what might happen on the stock exchange.

You can buy and sell RIs at varying durations, enabling companies to get 3-year pricing with short-term commitments (as low as one month).

Here’s a real life example: Company A buys a 3-year reserved instance for an m5.large instance, saving them 57%. After 2.5 years, they decide to upgrade their instance from an m5.large to an m7g.large and sell the remaining 6 months of their reserved instance on the marketplace. Company B sees the remaining 6-month commitment but with a 57% saving and buys it on the Marketplace, effectively getting a 3-year savings rate (57%) with only a 6-month commitment.

The good news is that you can buy these reserved instances right now in the AWS Console (see below). So what are you waiting for? Why don’t you start buying right now? Is there a catch?

Managing RIs Has Its Challenges

While the AWS RI Marketplace offers significant benefits, managing RIs manually is complex and resource-intensive:

1. Monitoring the Marketplace: The best deals fluctuate constantly, and you need to constantly track the marketplace to secure the best deals. Are you up at 2am on Sunday morning when the best price appears?

2. Aligning with Infrastructure Needs: Workloads change over time, and you need to constantly monitor your own usage. Without proper analysis, you may buy the wrong RIs at the wrong time, leading to underutilisation or unnecessary spending.

3. Tracking Expirations: If you’re trading in RIs, you’ll likely have to keep track of hundreds of reserved instances. As they expire, you need to replace them at the right time to maintain coverage.

4. Some RIs Are Not Bought: An RI can only be sold if there is a willing buyer. Until then, you are stuck with paying for the RI.

The Solution: Morfless – AI-Driven Reserved Instance Management

This is where Morfless comes in. Think of it as a high-frequency trading platform for AWS Reserved Instances:

• Continuous Monitoring: We track the RI Marketplace 24/7 to identify the best deals.

• Automated Buying & Selling: We buy RIs at the right time, ensuring you always benefit from 57% savings without overcommitting.

• Infrastructure Awareness: Morfless dynamically adjusts your RI purchases based on your infrastructure usage patterns, ensuring optimal efficiency.

• Large Customer Pool: We are able to move Reserved Instances between our customer base, ensuring you are never stuck with an RI you don’t need.

The Bottom Line

AWS Savings Plans work, but they leave money on the table. If you want maximum savings with minimal commitment risk, leveraging the AWS RI Marketplace is the best strategy. The only downside? Managing it manually is too time-consuming for most businesses, and you risk being stuck with an RI if you can’t sell it.

But by utilising a service like Morfless, a company spending $1 million annually on EC2 can save an additional $380,000 USD just by switching from their 1-year Savings Plan. That’s extra money that can be reinvested into growth, innovation, or reducing operational costs - without increasing commitment risk.

That’s why Morfless exists - to automate the entire process, so you get the best discounts without the hassle.