Managing AWS Reserved Instances with Automation and DevOps Tools

An AWS Reserved Instance (RI) is a billing discount that allows you to save on your compute usage costs. RIs are considered to be one of the most effective ways for AWS cost optimization. AWS says, “With Reserved Instances, you can save up to 75% over equivalent on-demand capacity.”

Now think about an organization having 10 AWS accounts, a total account billing $80,000 monthly, running on-demand compute instances. According to AWS reserved instance pricing, your bill will effectively reduce from $80,000 to somewhere around $20,000! That looks awesome!

However managing EC2 reserved instances can be challenging, especially when you have a large number of instances and different usage patterns.

Because RIs provide big savings, they also need big commitments and you’ll need to make several decisions. Do you buy 1-year RIs or 3-year RIs? Standard RI or convertible RI? When do you buy more RIs?  When do you sell the existing RIs?

To address these challenges effectively, you need to leverage DevOps and automation tools. 

• Use AWS Cost Explorer: AWS Cost Explorer is a free tool that provides you with insights into your AWS usage and costs. You can use it to visualize your RI utilization and identify opportunities for AWS cost optimization.
• Leverage AWS Lambda: AWS Lambda is a serverless compute service that can help you automate your RI management tasks. For example, you can create a Lambda function tuned to the AWS reserved instance pricing, to automatically purchase RIs when they are available at a discounted price, or to modify or exchange RIs based on your usage patterns.
• Use AWS CloudFormation: AWS CloudFormation is a service that lets you define and manage your AWS infrastructure as code. You can use CloudFormation templates to automate the creation and management of RIs. For example, you can use a CloudFormation template to purchase all your EC2 reserved instances based on specific criteria.
• Use AWS Trusted Advisor: AWS Trusted Advisor is a service that provides you with real-time recommendations to help optimize your AWS infrastructure. It can also provide you with recommendations for optimizing your RI usage, such as identifying underutilized RIs and opportunities to modify or exchange RIs.
• Use AWS Organizations: AWS Organizations is a service that lets you manage multiple AWS accounts as a single entity. You can use AWS Organizations to centralize your RI management and optimize their usage across all your accounts.

While AWS RI management tools can be useful, there are some potential drawbacks and limitations that you should be aware of:

• Limited customizability: AWS RI management tools may have limited customizability and flexibility compared to third-party tools. This may be a concern if you have specific use cases or requirements that are not supported by the AWS tools.
• Complexity: Some AWS RI management tools may be complex to set up and use, requiring advanced technical skills and knowledge. This may be a barrier for some users, especially smaller organizations or those with limited resources for AWS cost optimization.
• Cost: While some AWS RI management tools are free, others may come with additional costs, which may not be suitable for organizations with limited budgets. 
• Limited integration: Some AWS RI management tools may have limited integration with other AWS services. This may limit your ability to fully automate and optimize your EC2 reserved instances management.
• Lack of Alerting System: AWS RI Management tools do not provide a notification or alerting system to track daily budget breaches according to the AWS reserved instance pricing, upcoming RI expiries, and RI utilization thresholds.  

There needs to be a proper RI implementation strategy, to bring in the maximum benefits with minimum drawbacks or complexities. A dedicated Cloud FinOps team with skilled and experienced professionals would be of great help. Their efforts could also be amplified with the help of a third-party RI Management solution to streamline the buying, selling, and optimization of AWS reserved instances. 

Do you think you need a hand with optimizing your EC2 resources and managing Reserved Instances?
CloudKeeper Auto could help you streamline your entire AWS EC2 infrastructure and bring in substantial savings.
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