AWS Knowledge
Amazon EC2 Reserved Instances from the Marketplace
Piyush Kalra
Sep 16, 2024
Getting into AWS Savings Plans and Reserved Instances can be tempting since they present another way of lowering EC2 usage costs by up to 70%. Now the catch here, however, this saving does require a commitment of either 1 year or 3 years, which can be a lot for a company to commit to. While it is paid monthly, it still does seem frightening. However, there is a third option. You could buy a USED (for EC2) reserved instance from another AWS customer, for a fraction of the length commitment. Think of it this way, if one customer used a reserved instance for 4 months, and no longer wants to use that EC2 instance, they could sell it on the EC2 Marketplace.
The EC2 Reserved Instance Marketplace
How the Marketplace Works
EC2 Reserved Instance Marketplace is one of those special services offered to AWS customers to buy or sell RIs in the ec2 environment. In case you find yourself in such a situation where you have more capability than you regularly use due to seasons of business or in the case where your habits change, you have an opportunity to place these RIs on the marketplace for sale. In this way, you not only recover a part of your initial investment but also then let other users acquire these RIs and hence better the effective use of the resource in the marketplace. This mechanism creates another dimension of flexibility and liquidity to relative arms resources management and thus helps in quick adjustment to business changes.
Pros of The Marketplace Shopping
Procuring RIs from the marketplace provides a number of benefits that may weigh on your cloud strategy to a large extent. For instance, you will find EIs with various terms-alths ranging from 1 year to 3 years and flexible payment options plans that you can work within your budget. Besides, many more products in the market are on promotion with lower prices than the standard pricing. Therefore, you can save a lot. This allows not only that you order according to your functional needs, but you can also control how much you spend while maximizing the use of cloud resources. In a way, one could say that the marketplace provides just the right channels through which every individual makes decisions in consonance with the objectives of the organization.
Tips for Selecting RIs
When buying RIs in the marketplace, here are some of the things you need to observe:
Check Compatibility: Check whether the RI has the correct…
Region (example: US East (N. Virginia))
operating system
Instance size
Evaluate Pricing: Look for the lowest total cost including both the upfront charge and the hourly rates.
Review Term Lengths: Pick RIs with term lengths that correspond with the timelines of the projects
To check, Go to the AWS Pricing Calculator.
Limitations and Restrictions on Selling Reserved Instances
It is important, however, to know the limitations and restrictions before you list your AWS Reserved Instances as no one would want a surprise party they did not plan for. Keep in mind that only Standard Reserved Instances are allowed to be sold, whereas the Convertible Reserved Instance is akin to that friend who never turns up for the party, you guessed it, they cannot participate in the Marketplace. Also, note that before the seller can list their instance for sale, the instance must have at least 30 days left in the term and the seller must have owned it for at least one month. After all, we do not want you selling something that is like a week old since you adopted it!
Additional requirements include:
Sellers can only list AWS Reserved Instances that have been active for at least 30 days and after AWS has received the upfront payment options (if applicable).
Sellers must have a US bank account.
There must be at least one month remaining in the term of the Reserved Instance being sold.
You can sell Reserved Instances either up to $50,000 or a maximum of 5,000 Reserved Instances, whichever limit is reached first. These caps are global and apply for the lifetime of your account.
AWS Reserved Instances in the GovCloud region are not eligible for sale.
The seller fee of every Reserved Instance sold in the Amazon EC2 Reserved Instance Marketplace is 12% of the total upfront price. That will be added to your anniversary bill.
Your company name (and address, if requested) will be shared with the buyer for tax purposes.
If you wish to successfully buy or list an instance for sale on the Reserved Instance Marketplace, stay abreast of these policies and policies.
View Your EC2 Instances RI Report
An RI Marketplace report is significant for effective monitoring and reporting on the use of EC2 Reserved Instances. The report can be accessed in the EC2 Reserved Instances Console, which refines your monitoring strategy and enhances the control and management of budgets by offering customized metrics and a clear understanding of application parameters.
This report is significant for resource allocation and cost minimization, providing cost-effective alternatives. It costs $0.01 per request, and you will need two requests in order to obtain the recommendation data. If you have more than one resource across different accounts that you need to manage, then you might need additional requests. The cost of requests is included in the RI Instances Cost Dashboard.
To access your Reserved Instances purchased from the marketplace:
Go to the Amazon EC2 console.
In the navigation panel, choose Reserved Instances.
The list of queued, active, and retired Reserved Instances contains the State column, which indicates the state of each of them.
Reports such as the EC2 RI Coverage Report and the Utilization Report may provide an affordable answer for the organization to measure performance regarding investments and learn more about how reserved instances are used. Reviewing those reports brings out the chances for optimization and measurable saving on costs related to usage of cloud resources, therefore helping make better decisions.
To understand more about EC2 RI Coverage Report, refer to our article How to Analyzing Your EC2 Ri Coverage Report?
Case Studies and Real-World Applications
Upwork Saves 45% on Compute Costs
Upwork is one of the most popular freelance marketplaces where clients can connect with independent professionals. It successfully migrated its AWS infrastructure to optimize its operational efficiency, leveraging the cost savings of AWS Savings Plans that provided it with an impressive 45% reduction in compute costs. A company studies its usage patterns and then commits to a certain level of usage that matches their business needs. This strategic optimization only optimized their cloud spending but also ensured seamless and reliable customer experience so that freelancers and clients could connect uninterrupted.
Ula Leverages Spot Instances
Ula, an Indonesian B2B ecommerce app, utilized Amazon EC2 Spot Instances to build a cost-effective and scalable purchasing platform for small businesses. By taking advantage of the lower pricing of Spot Instances, Ula reduced its operational costs while maintaining high availability and performance.
Conclusion
Amazon EC2 Reserved Instances and the EC2 Reserved Instance Marketplace offer powerful tools for optimizing cloud resource management. By understanding the different types of RIs, leveraging the marketplace, and implementing effective monitoring strategies, businesses can achieve significant cost savings and improve resource utilization.
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