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Reserved Instances ROI

Calculate potential savings from 1-year and 3-year cloud commitments vs on-demand pricing with comprehensive ROI analysis for AWS, Azure, and Google Cloud.

Reserved Instances Configuration

Analysis Parameters

85%
10%
Annual On-Demand Cost
$18,000

Recommended Option

Best Option
3-Year All Upfront
Total Savings
$13,500
ROI
41.7%
Payback Period
54 months

Available Commitment Options

OptionTermDiscountUpfront CostMonthly CostTotal SavingsROI
1-Year Partial Upfront1yr20.0%$7,200$600$90012.5%
1-Year All Upfront1yr22.0%$14,040$0$1,2609.0%
3-Year Partial Upfront3yr35.0%$17,550$488$10,80061.5%
3-Year All Upfront3yr40.0%$32,400$0$13,50041.7%
Compute Savings Plan - 1yr1yr17.0%$0$1,245$360
Compute Savings Plan - 3yr3yr28.0%$0$1,080$7,020

FinOps Best Practices

Optimization Tips

  • • Start with 1-year commitments to reduce risk
  • • Monitor utilization rates monthly
  • • Consider Savings Plans for flexibility
  • • Review and adjust every 6 months

Risk Factors

  • • Usage changes can reduce savings
  • • Technology migrations may impact utilization
  • • Market pricing may drop below reserved rates
  • • Consider business growth patterns

Understanding Reserved Instances

Reserved Instances (RIs) and Committed Use Discounts (CUDs) allow you to commit to using specific instance types for 1 or 3 years in exchange for significant discounts. While they can offer savings up to 72% compared to on-demand pricing, they require careful analysis to ensure they align with your actual usage patterns.

Our ROI calculator helps you make informed decisions about reservation commitments by analyzing the financial impact of different commitment types, terms, and payment options for your specific cloud workloads.

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