How To Perform Convertible Reserved Instance Exchanges

How To Perform Convertible Reserved Instance Exchanges

CloudHealth Tech Staff
Published:
Oct. 11, 2018
4 minute read

If you are unfamiliar with convertible Reserved Instance exchanges, our useful “how to” guide explains the simple exchange process, provides some “cans” and “can’ts”, and offers a solution for maximizing the benefit of AWS´ latest cost-saving innovation.

Back in September 2016, AWS announced the launch of convertible Reserved Instances—Reserved Instances you could exchange for new instance types, new tenancies, and new operating systems as your requirements changed. Similar to AWS´ existing Reserved Instances (RI) program, you can purchase convertible Reserved Instances (convertible RIs) for one-year or three-year terms, and pay the cost all upfront, partially upfront, or no upfront.

The uptake on convertible RIs has been huge. There’s no charge for exchanging convertible RIs, and convertible reserved instance exchanges enable you to take advantage of AWS price cuts during the term of the purchase—something you can’t do with standard RIs.

 

The Flexibility of Convertible Reserved Instances

When you see the opportunity to reduce costs by purchasing Reserved Instances, you have the choice of purchasing standard or convertible Reserved Instances. Convertible RIs do not attract such a high percentage discount, but their flexibility more than makes up for that. For example, convertible RIs can be merged, split, or modified before requesting convertible reserved instance exchanges to ensure you exchange assets for the best possible match.

You have to be a little bit careful when merging convertible RIs because the expiration date of the new convertible RI has to be the same as, or later than, the furthest convertible RI you have merged. For example, if you are merging convertible RIs with expiration dates six and eighteen months in the future, the new convertible RI has to have an expiration date of at least eighteen months. This also means you can´t exchange the merged convertible RI for another convertible RI with a one-year term.

Splitting and modifying convertible RIs is much more straightforward and involves dividing an existing convertible RI with multiple instances into two sections—one section you want to keep as it is, and the other you want to exchange for a different type tenancy or operating system. Unfortunately, exchanges are not universal inasmuch as there are some limitations on what you can exchange for what. These limitations include:

  • You can’t move regions to save money or exchange a convertible RI for one of lesser value (AWS will automatically assign a number of instances to ensure the total value is the same or higher than that of the exchanged Convertible Reserved Instance).
  • You can’t exchange convertible RIs on an All Upfront or Partial Upfront payment structures for convertible RIs on a monthly payment structure; although you can exchange All Upfront convertible RIs for Partial Upfront convertible RIs and vice versa.
  • You can´t change the instance size within a convertible RI on Windows OS (not supported) or on RedHat or SUSE Linux OS because of licensing differences, and some convertible reserved instance exchanges are not possible due to some instance types not being supported.

How to Perform Convertible Reserved Instance Exchanges

You can perform convertible reserved instance exchanges via the Amazon EC2 console or a command line tool (AWS CLI or Tools for Windows PowerShell). The console route follows the process of:

  • Log into the EC2 console and click “Reserved Instances”.
  • Select the convertible RI to exchange and click “Actions” > “Exchange Reserved Instance”.
  • Use the drop-down menu to find the configuration that matches your requirements.
  • Select the new convertible RI and click “Exchange”.

During the process, you will be advised of any true-up costs that apply if the configuration you have selected requires more resources than the convertible RI you are exchanging. As mentioned above, you can´t exchange a convertible RI for one of a lesser value. Once completed, there is a gap of a few minutes before convertible reserved instance exchanges take effect.

The process for performing convertible reserved instance exchanges via a command line tool is similar to the EC2 console process, but takes a little longer due to having to find a target convertible RI that matches your requirements (there is no drop-down box from which to select your exchange) and because you have to wait for a quote for the exchange and any true-up cost.

Keeping on Top of Convertible Reserved Instance Exchanges

In the same way, as it is important to manage standard RIs efficiently, it is important you stay on top of convertible reserved instance exchanges. 

Calculating which convertible RIs are suitable for exchanging can be time-consuming and needs to be an ongoing process. Fortunately, businesses now have the opportunity to take advantage of CloudHealth´s Convertible Reserved Instance Exchanger—a new capability on the CloudHealth Platform that analyzes asset usage and recommends when convertible reserved instance exchanges are appropriate.

In her blog “Amazon Convertible Reserved Instance Exchanges Made Easy”, Rachel Dines—our Senior Director of Product Marketing—gives a practical example of how to use this new capability and explains how it can save businesses tens of thousands of dollars in minutes. Rachel´s blog is essential reading for any business using convertible RIs and, if after reading it, you have any questions about convertible reserved instance exchanges, do not hesitate to contact us.