Businesses and Enterprises don’t necessarily require the flexibility to quickly enable and disable new computing capacity. Instead, they may require long-term, computing capacity, as they already have defined their computing requirements and would instead focus on saving. AWS provides EC2 Reserved Instances (RIs) that offer a significant discounted hourly rate compared to On-demand instances. AWS offers three types of EC2 RI types:
- Standard RIs: Provides the largest discount (Up to 72% compared to On-Demand) for the reservation on a particular type of EC2.
- Convertible RIs: Provide a discount (Up to 54% compared to On-Demand) and add the ability to change attributes of the instance as long as the change is of equal or greater value.
- Scheduled RIs: Instances that are available to launch at a particular time window you reserve. Allow the management of capacity at a discount when dealing with predictable recurring schedules.
EC2 instances, unlike global services, run in a specific AWS region. An organization can decide on what region the instances are launched. Some organizations, however, desire control over what Availability Zone to which the instances will belong. Capacity Reservation, as its name implies, allows the reservation of the capacity to launch EC2 instances in an Availability Zone for any duration. Capacity Reservation doesn’t require long-term commitment; it can be created, used for as long as it needs to be, and then canceled. All that needs to be specified when making a Capacity Reservation is:
- Availability Zone
- Number of instances
- Instance attributes: instance type, tenancy, and platform/OS
However, it is important to understand that billing will be based on the reserved capacity, not on the instances that are running. Therefore it is important to commit to using the reserved capacity and cancel reservations if they are no longer required.
Many organizations and businesses that want to transition to AWS have significant resources tied to licenses from companies such as Microsoft, SAP, or Oracle. Licensing is considered a significant expense, and many companies can consider Licensing as one of the main factors that decide if they invest to transition to the cloud and to which provider. AWS provides the ability to Bring Your Own Licenses (BYOL) for organizations to avoid reinvesting in licenses.