Cloud FinOps

Chapter 13. Paying Less with Reserved Instances and Committed Use Discounts

Reserved Instances (RIs) are the essence of FinOps. They bridge the gap between technology teams and finance teams, requiring alignment that can be challenging to achieve. However, when alignment is reached, RIs can bring a significant competitive advantage in the form of improved cloud unit economics, giving you the same compute power for a fraction of the price.

Note

This chapter is one of the most likely to become out of date—probably before this book even makes it to market—as there are always new updates to cloud provider offerings. We suggest checking the details in this chapter against what your cloud service provider is currently offering by going to http://FinOps.org/Book. Fear not, though: while there have been many changes to offerings over the years, the core best practices around reservations remain consistent.

Introduction to Reservations

RIs and Committed Use Discounts (CUDs), collectively known as reservations or commitments, are the most popular cost optimizations that cloud service providers offer. This is partially because they use extensive marketing to convince you that you can save massive amounts by going to the cloud, but it’s also because FinOps platforms enable you to plan, manage, and benefit from these optimizations.

Each cloud service provider has a slightly different offering with its own specific rules on how it works and the discounts it provides. You must also consider ...