Monday, October 11, 2010

Reserved vs On-Demand Instances

On Amazon EC2 these terms have the following meaning:
  • Reserved instances:
    They give you the option to make a low, one-time payment for each instance you want to reserve and in turn receive a significant discount on the hourly usage charge for that instance.
  • On-Demand instances:
    They let you pay for compute capacity by the hour with no long-term commitments. This frees you from the costs and complexities of planning, purchasing, and maintaining hardware and transforms what are commonly large fixed costs into much smaller variable costs.
I had a look today at the problem of finding the optimal division between Reserved and On-Demand instances. With the optimal solution being the one with the smallest total cost. My findings (in an Excel file) can be found here. Or I put them in two pdf files as well:
  • General Pricing Information: download here
  • Practical Example: download here

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