In March, AWS launched its latest enhancement to their EC2 Reserved Instances (RI) offering by providing size flexibility. Essentially, Regional Linux/UNIX RIs with shared tenancy apply to all sizes of instances within an instance family and AWS region – i.e., coverage is now across all instance sizes in the class. So if you have a c3.large RI, you can use it against a c3.xlarge instance. AWS will charge the RI rate plus half of the on-demand rate to cover the other half of the instance usage. Furthermore, a single instance can use more than one RI. So, if you’re running an m4.large instance with an RI and need to move up to a m4.xlarge, you can buy another m4.large RI and both will be used with your instance. A couple of caveats: 1) this only applies to Linux/UNIX with shared tenancy and an RI set to regional and 2) it’s not available in gov-west or the China regions.
So What Does This Mean for AWS Partners?
The immediate implications were negative for many Partners as their third-party billing applications required a few weeks to make appropriate pricing adjustments. For us, we were able to make the appropriate changes within a few days. However, many Partners had to delay client billing for several weeks impacting their cashflows. On the positive side, this new enhancement makes RIs even more attractive.
As a Partner, you have more flexibility, which means less risk and greater upside. The bottom-line is that RIs are the best way to increase your margins (which are already slim) as a reseller. The enhancement does seem to make the RI purchase model even more complex … which was already complex. The good news is you have Parquantix to do that for you! Our automated arbitrage tool manages the complexity and our data-driven algorithms decide which risks are worth taking. You’ll quickly learn that you’re leaving (a ton of) money on the table by not using our fully automated arbitrage tool designed exclusively for AWS Partners.