AWS Reserved Instance Management – Is Automation the Key?

Reserved Instances (RIs) are a pricing model that offers cloud users discounts in return for their long-term commitment to EC2, RDS, and other AWS services. RIs offer better rates than on-demand prices, making it a highly effective way to cut down costs on the cloud. Organizations highly dependent on cloud infrastructure utilize RIs to enjoy higher savings and workflow stability in the long run. 

Despite the apparent benefits, Managing RIs in a changing cloud environment can be tricky even for veterans. If you’re not familiar with the variability in instance types, storage classes, or regional and availability zone considerations in comparison to the complexities of your usage patterns, you may end up missing out on big savings or even incur losses due to wasted upfront payments. 

And even if you somehow get it right, manually managing RIs to extract the best business value from your commitments is a different ballgame altogether. You’ll find yourself struggling with inefficiencies due to human errors and misjudgments. Optimization becomes a challenge with limited insights and agility. As your business grows, it’ll get even harder to manage your RIs manually, and eventually, saving cloud costs will become an unachievable dream.

Automating is the best way to go!

It’ll not only make your life easier but also increase efficiencies, reduce mistakes, give you ample opportunities to optimize, and allow you flexibility as your business grows. Automating monitoring will also offer more granular insights which will enable you to make smarter decisions to save cloud costs. Automation will also empower you to create a culture of cloud cost accountability within your organization with features like tagging and custom notifications on usage and payments. 

Why automate?

Here’s a thorough comparison highlighting the benefits of automating your Reserved Instance Management processes based on various performance indicators: 

Criteria With Automation Without Automation
Efficiency Save time and resources leading to higher efficiencies. Requires significant manual effort and time investment
Accuracy Reduces the possibility of human errors Higher risk of mistakes due to manual processes
Optimization Analyzes usage patterns and optimizes RI utilization Limited ability to optimize RI portfolio effectively
Scalability Scales efficiently to accommodate growth Becomes increasingly challenging as business grows
Adaptability Responds quickly to changes in usage patterns Difficult to adapt RI portfolio without automation
Cost Savings Maximizes AWS cost savings by optimizing resource utilization Higher possibility of wasted resources and increased costs
Proactive Monitoring Offers real-time alerts and notifications for Reserved Instance Management Manual tracking and monitoring
Agility Enables agile management of RIs in dynamic environments Limited agility without automation

What to automate?

Automating Reserved Instance management allows you to perform various tasks efficiently and effectively. Here are some of the key activities you can automate:

  1. Purchasing & Modification of RIs: You can automate the process of buying RIs based on your predefined instance type, region, term length, and quantity. You can set up rules to automatically purchase RIs when specific usage thresholds are met or purchase RIs on a recurring schedule. You can go a step further and even automate the modification of existing RIs to better align with your changing workload requirements.
  2. Resource Utilization Tracking: Leverage automation to track your RI utilization. This will enable you to identify instances that are not covered by RIs ensuring that your RIs are being utilized effectively. This will even help you identify opportunities for further optimization and make better decisions ensuring cloud cost optimization.
  3. Automate Allocation: You can use automation to allocate RIs to specific instances or workloads based on your usage patterns, instance tags, or other criteria. This will ensure that your RIs are being applied where they can provide the most AWS cost savings and highest value.
  4. Custom Alerts & Reporting: Use automation to generate custom alerts based on consumption or recurring payment allowing you to monitor your RI leakages, manage expiration dates, and take action to renew, modify, or release RIs as needed. This will prevent your RIs from expiring unused and ensure ongoing cost optimization. Also automatically generate custom reports related to RI usage, AWS cost savings, and optimization efforts allowing you to stay informed about the performance of your RI portfolio enabling better decision-making.
  5. Integrate automation with other Tools: You can integrate automation with cloud cost management tools and platforms to leverage advanced analytics, recommendations, and visualization capabilities for optimizing RI usage and achieving cloud cost optimization.
  6. Policy Enforcement: You can even use automation to ensure compliance with your budget constraints governance requirements, and best practices for cost optimization. You can even enforce RI purchasing and allocation policies and achieve operational efficiencies. 

How to automate?

AWS offers native tools and services like AWS Cost Explorer, AWS Trusted Advisor, AWS Budgets, etc. that can help you efficiently manage your RIs. You can even leverage third-party tools like CloudKeeper Auto which will offer you higher discounts on RIs and will enable you to automate your Reserved Instance Management process. 

It’s fairly obvious, with the comparison above, that you’re missing out on higher efficiencies and cost savings if you haven’t implemented automation in your AWS Reserved Instance Management processes. Yes, Automation is the key to unlocking the maximum business value from the cloud enabling you to save big and grow even bigger. 

If you’re thinking about – When to automate? If you’re already using RIs, NOW would be a great time to start!

By Aman Aggarwal