When does a reservation stop paying?

Below the utilisation break-even, which at a thirty-five percent discount is around sixty-five percent. A reservation on an instance you run half the month costs more than on demand.

What suits spot pricing?

Anything interruptible: batch processing, CI runners, stateless workers. Not a database, and not anything where a two minute eviction notice is a problem.

Technologycloud

VM and EC2 Cost Comparison

Instance pricing across on demand, reserved and spot. A reservation is billed whether the instance runs or not, so below roughly sixty percent utilisation on demand is cheaper despite the higher rate.

Also called: instance pricing comparison, reserved vs on demand.

Cheapest option

₹10,512

Three year reserved at ₹10,512 a month. On demand is ₹23,360, one year reserved ₹15,184, three year ₹10,512 and spot ₹5,840. At 100% utilisation, the workload does not tolerate interruption, so spot is excluded from the comparison.

On demand

₹23,360

One year reserved

₹15,184

Three year reserved

₹10,512

Spot

₹5,840

Cost per vCPU

₹1,314

Cost per GB of memory

₹329

Cheapest option

Three year reserved

On utilisation

the workload does not tolerate interruption, so spot is excluded from the comparison.

On prices

Prices are inputs, not constants. Provider pricing changes continuously, so take the current rate from the provider calculator rather than relying on a default here.

How this is calculated

Method and background

How this is calculated

On demand bills per hour used. A reservation bills the full period regardless of use, so the discount only pays above a utilisation threshold: at a thirty-five percent discount, the break-even is around sixty-five percent utilisation. Spot instances offer the deepest discount and can be reclaimed at short notice, which suits batch and stateless work and not a database. The comparison here holds the instance constant so the pricing model is the only variable.

a reservation is billed whether used or not, so it only wins above a utilisation threshold

d: Discount

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

full utilisation favours a reservation

vCPUs: 8
Memory: 32 GB
On demand hourly: ₹32
One year commitment discount: 35%
Three year commitment discount: 55%
Spot discount: 75%
Hours actually needed: 100%
Workload tolerates interruption: No

Cheapest option₹10,512

32 x 730; x 0.45

Open this example

low utilisation favours on demand

vCPUs: 8
Memory: 32 GB
On demand hourly: ₹32
One year commitment discount: 35%
Three year commitment discount: 55%
Spot discount: 75%
Hours actually needed: 25%
Workload tolerates interruption: No

Cheapest option₹5,840

boundary: a reservation bills the full month regardless

Open this example

Method and limits

What it assumes

A single instance type running for the stated share of the month.

What it deliberately does not model

Spot availability and pricing vary by region and instance type and can disappear entirely.
Reservations may be convertible or transferable, which changes their risk profile.
Savings plans price differently again from instance reservations.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

When does a reservation stop paying?: Below the utilisation break-even, which at a thirty-five percent discount is around sixty-five percent. A reservation on an instance you run half the month costs more than on demand.
What suits spot pricing?: Anything interruptible: batch processing, CI runners, stateless workers. Not a database, and not anything where a two minute eviction notice is a problem.