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Choosing the Right EC2 Instances to Optimize Your Cloud
Cost Optimization

Webinar Lessons: How to Craft Your AWS RI Strategy

By Leslie McCollom on October 26, 2018
Craft an AWS RI purchasing plan with these steps and lessons from our recent webinar.
Google Cloud Platform Support Delivers Visibility for Cost Efficiency

Reserved Instances (RIs) are the most critical component for companies looking to control AWS spending. But developing an RI buying strategy doesn’t just happen overnight.

Keith Jarrett, Worldwide Business Development Lead – Cost Optimization, Amazon Web Services, joined Cloudability’s Co-Founder and GM, EMEA, J.R. Storment, to discuss the fundamentals of RIs and share a step-by-step process to help your company effectively buy and manage RIs.

Keith and his team have saved customers tens of millions of dollars, and their sole focus is to ensure companies are reaching the full economic potential of AWS through cost optimization.

As our co-founder, J.R. has worked for the last eight years with some of the world’s largest cloud spenders, including BP, Atlassian, and more on their cloud cost optimization strategy. J.R. is one of the leading practitioners and thought leaders within the discipline of cloud cost management.

J.R. and Keith combined their expertise to devise the following steps for kickstarting an effective RI strategy that will save significant time, money and resources.

Learn the Fundamentals of RIs

Like any new discipline, it’s essential to start by learning the fundamentals of RI planning and strategy before diving in. First off, what exactly is an RI? An RI can be thought of as a coupon that allows customers to make a commitment to an AWS instance for a one-year or three-year time period for a reduced rate of up to 75% off of on-demand pricing. Unlike rightsizing and other cost savings measures, RIs require no upfront engineering efforts to put into place, and you can see them take effect on your bill immediately.

So why doesn’t every team just run out and buy RIs? J.R. says the blocker to purchasing is often a lack of consistent education across teams about what RIs are and how they can help.
The most common mistake he sees at this point in the process is people waiting too late to make that first RI purchase.

Proper education can head off most mistakes at the pass, so connecting your teams with the right education and support is essential. It’s an organizational challenge to make sure that the expertise and training is distributed across your departments so even teams at the edge of your organization can be enabled to move quickly, but with the right accountability in place first.

Another great place to start is by identifying workloads that are good candidates to turn off outside of business hours. This can result in immediate and significant savings. After all, 66% of the month is nights and weekends, so you can get the most savings from doing basic things like this when getting started.

Build Your Process

Continuous spend optimization is a practice, not a one-time event.

Your infrastructure is going to be changing all the time, so you want your RIs to be the other side of this coin that balances out the fluctuation and brings stability to your cloud environment.

You do want to start by learning the basics, but the goal should be to make your first RI buy as soon as possible so you can start learning from that process immediately to build your ongoing RI purchasing and rightsizing strategy and operationalize it at scale.

Which leads us to the next step:

Purchase RIs Regularly and Quickly

The reason for this step is that cloud is designed for just-in-time purchasing, and so are RIs. The data center environment made it so you had to buy capacity ahead of demand that often ended up going unused, just to keep performance stable. AWS and the cloud allow you to bring up resources as your demand fluctuates. The result? Less waste, with very high performance and customer satisfaction. Just like AWS instances, you don’t want to buy RIs before you need them, but you also don’t want to wait until it’s too late.

Learn the Next Steps

We can’t emphasize enough that RIs and rightsizing are not something you do once and then move on. They are components of a continuous process of cloud cost optimization. When done well, and as part of a larger culture of cloud cost management, your organization can reap many benefits from informed RI purchases. And using timely, actionable insights provided by a tool like Cloudability, your organization can continuously monitor and optimize cloud spend for the most savings possible.

To learn the next steps you’ll want to take to build your RI purchasing strategy, hear customer-proven best practices and the savings they achieved, watch our recorded webinar.

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