An Update on Convertible RIs

Share this Post

Back in October we provided our initial thoughts about Convertible RIs. After a few months of implementation and observation, we want to provide a brief update. If you recall, Amazon described Convertible RIs as follows: “With Convertible RIs, customers now have the option at any time to change the instance family, OS, or tenancy associated with their RI.”

So what conclusions can be drawn from these new RI types?

  • Convertible RIs are very good for edge cases – for example a g2.2xlarge (Windows) RI.
  • Discount rates with Convertible RIs are considerably smaller than with a standard RI.
  • Convertible RIs are not a great fit for more common instances like an m4.large Linux.
  • The fact that you can only trade in for Convertible RIs of an equal or greater value and a three-year commitment is required, greatly limits the practical uses of Convertible RIs.
  • You can use convertible RIs to take advantage of future price reductions or you can use them to handle usage changes, but you really can’t do both.
  • Convertible RIs have allowed us to increase the overall RI utilization rate for our clients by letting us expand our risk model into more obscure instance types.

Bottom Line

Convertible RIs do have benefits for many of our Partners. However, the ROI for these new types is more limited than some of the initial hype would have led us to believe. In addition, there are some limitations on how an RI can be converted that makes each Partner’s strategy on how to use them unique. So, be careful and buy Convertible RIs in the situations described above.

Leave a Reply