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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.