Of all the means available to AWS users who are looking to reduce their cloud spending, there is one that definitely ranks amongst the most effective – Reserved Instances.

What are AWS Reserved Instances?

A Reserved Instance is a reservation of resources and capacity for a specific duration (1 or 3 years). Instances are available at various levels of computing power and AWS users purchase them at contract prices, plus hourly rates. The reservations of these instances are region-specific (us-east-1, eu-west-2, etc.) and not linked to a specific Instance to computing time. Users purchasing Reserved Instances can choose between Regular Reserved Instances or Convertible Reserved Instances (which provide more flexibility for an additional charge).

The basic idea is that when users purchase reservations, they commit to paying for all of the hours of the 1- or 3-year term; in exchange, the hourly rate is lowered. Details aside, what’s essential to know is that if used wisely, Reserved Instances have the potential to significantly lower your cloud bill.

How Do Reserved Instances Help Save Money ?

Reserved Instances come in handy when AWS users know in advance that they’ll be needing a certain duration of computing power in the future. Purchasing Reserved Instances provides significant cost savings for the same amount of computing power, in comparison to new instances.

When purchasing Reserved Instances, users can opt for no up-front payment, partial payment or pay in full. The higher the upfront payment made by the user, the more savings (s)he accumulates. What follows is a table that perfectly illustrates the utility of Reserved Instances.

Purchasing Reserved Instances allows users to reduce their spending by up to 50%! Now that’s a significant reduction in spending, especially for companies who have relatively large footprints on AWS.

Saving Money By Accurately Predicting Future Needs

At the end of the day, it would be useful to note that it all boils down to one thing: accurately predicting the amount of computing power you’ll be needing in the future. This can be achieved by analyzing billing data for the past few months or simply by having the technical expertise required to make an accurate forecast of future needs.


In conclusion, Reserved Instances are an effective means for AWS users to reduce their cloud spending. By reserving resources and capacity for a specific duration at contract prices and lower hourly rates, users can save up to 50% compared to purchasing new instances. To maximize cost savings, accurate prediction of future computing needs is necessary. By analyzing billing data and forecasting future needs, companies can take advantage of the benefits of Reserved Instances and optimize their AWS usage to achieve significant cost savings. Ultimately, investing time and effort into understanding and leveraging Reserved Instances can lead to more efficient and cost-effective AWS usage.

About TrackIt

TrackIt, an Amazon Web Services Advanced Consulting Partner based in Marina del Rey, CA, offers a range of cloud management, consulting, and software development solutions. Their expertise includes Modern Software Development, DevOps, Infrastructure-As-Code, Serverless, CI/CD, and Containerization, with a focus on Media & Entertainment workflows, High-Performance Computing environments, and data storage.

TrackIt excels in cutting-edge software design, particularly in the areas of containerization, serverless architectures, and pipeline development. The company’s team of experts can help you design and deploy a custom solution tailored to your specific needs.

In addition to cloud management and modern software development services, TrackIt also provides an open-source AWS cost management tool to help users optimize their costs and resources on the platform. With its innovative approach and expertise, TrackIt is the ideal partner for organizations seeking to maximize the potential of their cloud infrastructure.

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