CATEGORIES
- WEB STARTUPS
- CONFERENCES
- WEB JOBS
- MICROSOFT
- INTERVIEWS
- VIDEO
- AMAZON
- ALL TOPICS
CONTRIBUTORS
Amazon Web Services Launches “Reserved Instances” — Basically a Pre-Paid Model
Amazon has announced a new pricing and purchasing option for their EC2 product which is part of the AWS (Amazon Web Services) product lineup. The pricing is somewhat confusing but it’s basically a pre-paid model which lowers the hourly usage fees. Check out the pricing charts to see how the reserved instances pricing works.
Here’s a sample for usage in the U.S.:
- The standard price for a small computing instance is $0.10/hour
- If you pay for a reserved instance for 1 year, the cost is $325 and the computing usage drops to $0.03/hour
- If you pay for a reserved instance for 3 years, the total cost is $500 and the computing usage stays at $0.03/hour
We could do the math to see at which point does it make sense to pre-pay but it’s too early in the AM for that. There also a good discussion about the new reserved instances on Ycombinator. A couple of the commenters on Ycombinator have tried to do the math to compute actual pricing.
If you purchased the reserved instance, you are banking on the fact that you will want to remain with Amazon (and that they will be in business) for at least a year. The payment is non-refundable.
Also have a look at our recap of the Amazon Web Services Executive Briefing from last week.
[...] Web Services division has announced a new pricing model for EC2 reserved instances today. The reserved instances offering launched earlier this year and is basically a pre-paid option for the EC2 service. Amazon [...]
hours in a year: 8760
pricing for small instance
spend for a year at 0.10: $870
spend for a year at 0.03: $262.8
cost per year for reserved (1 year): 587.8
cost per year for reserved 3 year (year 1): $765.8
cost per year for reserved 3 year (year 2): $262.8
cost per year for reserved 3 year (year 3): $262.8
total cost for 3 years for reserved 3 year: $1291.4
average cost per year for reserved 3 year: $322.85
monthly:
reserve over 3 years the monthly cost would be: $35.87
reserve over 1 year the monthly cost would be: $48.98
with no reserve the monthly cost would be: $72.50
in short over 3 years it saves you around 50% of the price which is pretty good.
one thing that is not clear is what happends if they drop the price.
yea see you uk’ers are already awake and got the math brain going :)
thanks darren!
if they drop the price i am betting you get zero back – you are hedging your bets today.
opps my average cost for 3 year is wrong should be $430.46 not $322.85