December 4, 2014
According to Jeff Barr, chief evangelist for Amazon Web Services, the new pricing model for Reserved Instances was launched after examining customer purchasing patterns. The new pricing model is meant to simplify things, but it also means the lowest price is only available to those who are willing to pay up front for a one-to-three-year term.
Barr noted the new pricing simplifies the EC2 Reserved Instance model, but it’s now composed of three separate payment plans, with a different pricing scheme for each. They include:
Paying everything up front. With this plan, customers pay for the entire Reserved Instance term of one to three years in a single, up-front payment. According to Barr, this provides them with the best hourly price.
Paying part of the fee up front. With this plan, customers pay for a portion of the Reserved Instance term right up front and then pay off the rest of it over the term. Barr wrote that the payment option strikes a balance between up-front and hourly payments.
No fees up front. With this plan, customers don’t pay anything up front, but have to commit to pay for a Reserved Instance over the one-year-term. Compared to paying for Reserved Instances on demand, the plan provides customer with about a 30 percent discount, Barr noted.
Compared to paying on-demand, it appears any of the three commitment options is cheaper, but it does lock customers into a contract for a period of time.
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