Ten years ago today, on March 12, 2009, AWS’ Jeff Barr announced the launch of EC2 Reserved Instances (RIs). At the time, Jeff spoke about the business model innovation that would give EC2 customers a discounted price in exchange for a term commitment. Over the subsequent years, AWS has continued to innovate in the RI universe with the addition of five other RI-able services, updated payment options in 2014, the convertible RI offering class in 2016, and more sophisticated convertible modifications in late 2017. Happy 10th birthday RIs… your next decade is gonna be stellar.
Of all the ways you can reduce waste and optimize costs on AWS—and we’re a fan of them all—RIs are our favorite. EC2 accounts for roughly 60% of all AWS spend and EC2 RIs offer discounts up to 77% off on-demand rates (trivia: which specific RI yields that discount? see below*). RIs are a powerful cloud cost savings construct, but are frankly hard to get right. In practice, about 1 of every 5 EC2 instance-hours is covered with an RI (aka RI coverage), which means today a minority of EC2 spend is benefitting from RI discounts. That doesn’t include the efficacy of purchased RIs (aka RI utilization) which, if not managed well, leads to paying for unmatched RI commitments or worse, double paying for both unmatched RIs and uncovered on-demand instances.
We saw firsthand the potential and complexity of using RIs while serving thousands of customers at Rackspace, where we started the AWS managed services business and grew it into one of the world’s largest AWS Premier Consulting Partners. We developed extensive experience with the major RI optimization tools and techniques, but came to realize that the core approach was lacking. The majority of customers still struggled to get a meaningful savings outcome because the current tools required ongoing human involvement from already busy teams. We saw it as a problem begging for a rethink.
That’s why we started ProsperOps. Our goal is to deliver an automated RI savings outcome, not provide an RI savings recommendation. You configure some initial guidance then we monitor and analyze your EC2 usage in real-time and algorithmically build and maintain an optimal RI portfolio. Most importantly, that portfolio adapts to your changing EC2 needs over time without the need for human involvement. Month after month, we handle the RI heavy lifting and you get the savings outcome. We call it Autonomous Reserved Instance Management—the easy button for RIs.
ProsperOps is part of a class of services known as AIOps, which leverage optimization and machine learning algorithms to perform tasks previously handled by humans. We know that DevOps and FinOps teams are smart, but busy—and in a world of increasingly complex and dynamic cloud environments, ongoing administration of RIs is operationally untenable and the results often suffer. The good news is that RI management is one of those tasks where an automated, algorithmic approach delivers better outcomes, while releasing teams from a complicated and unglamorous task.
This trend is already afoot in other industries like personal investing. Reporting and trading platforms like E*Trade, which provide data to users responsible for analyzing, managing, and executing investments, are giving way to robo-advisors like Betterment and Wealthfront, where algorithms do the work based on user guidance and expected outcomes. Sound familiar? ProsperOps is the robo-advisor for cloud.
One of our favorite questions to ask cloud practitioners who administer RIs is “what is your effective savings rate?” That is to say, with all the RIs you’ve purchased, with differing discount rates, changing EC2 usage, varying RI terms, etc. what is your discount off on-demand rates when all is said and done? In our experience, few people know that answer.
Learn your Effective Savings Rate for free
If you are struggling to administer RIs, are overwhelmed by their complexity, or just have other important work to focus on, that’s why we exist. We obsess about saving you money and improving your effective savings rate, month after month. Put your RIs on autopilot and get an autonomous savings outcome.
To sign-up for a free ProsperOps RI assessment or learn more, please take a look around our site. We’re currently serving customers in Early Access as we refine and perfect the experience. Space is limited so don’t wait to start saving.
Hello World! We’re pumped to be here.
Prosper On,
Chris, Erik, and Christopher (the ProsperOps founders)
* The RI with the single largest discount of 77% is the Standard 3-year all upfront for the m2 family running Linux/Unix in the US East (N. Virginia) and US West (Oregon) regions. Since the m2 is older, the current generation instance with the single largest discount of 73% is the Standard 3-year all upfront for the d2.8xlarge running Windows in the US East (N. Virginia), US East (Ohio), and US West (Oregon) regions.
