RIs provide significant savings compared to On-Demand instances, making them a smart option for predictable workloads. If you’re managing your AWS resources using AWS Organizations, understanding how RIs work is crucial for effective cost management and optimization.
I. Understanding Reserved Instance behavior in AWS Organizations: A general overview
Reserved Instances in the context of AWS Organizations can either be shared or kept private.
- Shared Reserved Instances: If an RI is in a sharing group—this is the default setting—other accounts in the organization can also utilize it, even if they don’t own it. The benefits of the RI is divided between all accounts in the group. The reservation of an RI gets automatically applied to the usage that matches the attributes across all the accounts in the organization.
- Private Reserved Instances: On the other hand, a private RI is available solely to the account that purchased it. This can be beneficial in scenarios where you want to reserve capacity for a particular workload or account in your organization.
II. Mechanisms of RI Sharing
- Purchasing in the Management Account: When an RI is purchased in the management account, the reservation discount is applied across all the accounts in the organizations. This is achieved since the management account functions as a ‘payer’ account in AWS Organizations.
- Purchasing in a Member Account: If an RI is purchased in a member account, the RI discount is first applied to usage within that account. If there is additional unused RI capacity, it is then shared across other accounts within the organization.
Table 1 shows how the behavior differs based on the location of the RI purchase.
| RI Purchased in Management Account | RI Purchased in Member Account | |
|---|---|---|
| RI discount availability | Across all accounts in the organization | Primarily applied to the purchasing account, then shared across the organization |
III. Reserved Instance Marketplace and AWS Organizations
When purchasing a Reserved Instance from the AWS Marketplace, whether the reservation applies to accounts in the AWS organization depends on the setting of the AWS Organizations service control policy (SCP) for the account that purchased the RI.
If the SCP allows the DescribeHostReservationOfferings action (which governs RI purchase), then the purchased RI can be shared across the organization, just like an RI bought directly from AWS.
IV. Reserved Instances and Consolidated Billing
AWS Organizations use consolidated billing, thus allowing multiple AWS accounts in an organization to consolidate their bills. When it comes to Reserved Instances, if more than one Reserved Instance matches a particular instance within an organization, AWS applies the Reserved Instance benefit with the most significant savings.
Remember that the goal of this explanation is helping you understand the behavior of Reserved Instances within an AWS Organization—particularly useful when aiming for AWS certification like the AWS Certified Cloud Practitioner (CLF-C02). This should provide a good foundation and prepare you for questions in the exam around AWS Reserved Instances and AWS Organizations.
Lastly, AWS services and features continually evolve. Therefore, you are highly recommended to always check the latest AWS documentation on Reserved Instances and AWS organizations for the most accurate and up-to-date information.
Practice Test
True/False: A Reserved Instance can be used by any account within an organization in AWS Organizations, regardless of whether or not it is shared.
- True
- False
Answer: True
Explanation: A Reserved Instance within an AWS organization can indeed be used by any account, so long as it matches the characteristics of the instance.
Which of the following options are a part of the Reserved Instance behavior in AWS Organizations?
- a) Automatically applies to instances that match attributes.
- b) Enable sharing with all accounts within the organization.
- c) You can modify your Reserved Instances at any time.
- d) Reserved Instances can be used across regions.
Answer: a), b) & c)
Explanation: Reserved Instances automatically apply to instances that match their attributes, and sharing can be turned on in AWS Organizations. Reserved Instances can also be modified, but they cannot be used across different AWS Regions.
True/False: Default behavior of Reserved Instances in AWS Organizations is to only provide benefits to the account that owns the instance.
- True
- False
Answer: True
Explanation: The Reserved Instances by default only provide benefits such as capacity reservation and discount to the account that owns the Reserved Instance.
The capacity reservation of a Reserved Instance applies to _____?
- a) All accounts within the organization
- b) the account that purchased the instance
- c) the accounts shared with
- d) None of the above.
Answer: b) the account that purchased the instance
Explanation: The capacity reservation in a Reserved Instance applies only to the account that purchased it.
Multiple select: What characteristics should match for a Reserved Instance to apply to an EC2 instance in AWS Organizations?
- a) Region
- b) Instance Type
- c) Availability Zone
- d) Platform
Answer: a), b) & d)
Explanation: For a Reserved Instance to apply to an EC2 instance, the Region, Instance Type, and Platform must all match.
True or False: You cannot stop sharing Reserved Instances with other accounts within your organization once you have enabled it.
- True
- False
Answer: False
Explanation: Sharing of Reserved Instances can be turned off anytime in AWS Organizations.
Single select: Which type of modification of a Reserved Instance cannot be done in AWS Organizations?
- a) Change the instance type
- b) Add or remove tags
- c) Change Availability Zone
- d) Change the hour of reservation
Answer: d) Change the hour of reservation
Explanation: While you can modify many aspects of a Reserved Instance in AWS Organizations like instance type, adding/removing tags, or changing the Availability Zone, you cannot change the hour of reservation.
True/False: Consolidated billing in AWS Organizations combines the usage from all AWS accounts in the organization to qualify for tiered pricing.
- True
- False
Answer: True
Explanation: Consolidated billing aggregates usage from all AWS accounts in the organization that helps them to qualify for discounts based on aggregate use.
AWS Reserved Instances are _____ to other accounts in the organization.
- a) Not shared
- b) Automatically shared
- c) Shared on request
- d) Shared based on resource availability
Answer: b) Automatically shared
Explanation: Reserved Instances are shared automatically with other accounts in the Organizations once you turn on RI sharing.
True/False: AWS allows you to sell your unused standard Reserved Instances on the Reserved Instance Marketplace.
- True
- False
Answer: True
Explanation: You can sell your unused Standard Reserved Instances in the Reserved Instance Marketplace, enabling another AWS customer to buy and utilize them.
Interview Questions
What is a Reserved Instance in AWS?
A Reserved Instance in Amazon Web Services (AWS) is a reservation of resources that provides significant discounts compared to on-demand instance pricing. They apply to Amazon EC2 and RDS services and can save up to 75% off the on-demand price.
Can Reserved Instances be shared within AWS Organizations?
Yes, Reserved Instances can be shared within AWS Organizations. If a Reserved Instance is not being utilized by the account that owns it, it can be applied to usage of other accounts in the organization.
How does Reserved Instance benefit sharing work in an AWS Organizations?
The sharing of Reserved Instance benefits occurs automatically within an AWS Organization. If an account within the organization purchases a Reserved Instance and does not use it fully, unused hours can be utilized by other accounts in the organization.
Are Reserved Instances available in all AWS regions?
No, Reserved Instances are not automatically available in all AWS regions. A Reserved Instance purchased in a specific region can only be used in that specific region.
Do Reserved Instances offer instance flexibility?
Yes, AWS offers instance size flexibility for Reserved Instances. This means that a Reserved Instance can be used for instances of different sizes within the same instance family, in the same region.
How are Reserved Instances billed in an AWS Organization?
The account that purchases the Reserved Instance is responsible for the cost. However, if the Reserved Instance hours are utilized by another account within the AWS Organization, that usage appears on the billing report of the account that uses the instance hours.
What is the duration for which you can reserve an instance in AWS?
You can reserve an instance in AWS for 1 or 3 years.
Can Reserved Instances be sold in the Reserved Instance Marketplace?
Yes, if you have a Reserved Instance that you no longer need, you can sell it in the AWS Reserved Instance Marketplace to other AWS customers.
Can you modify a Reserved Instance?
Yes, AWS allows you to modify certain attributes of your Reserved Instances, such as instance size, network platform, or availability zone, depending on the type of Reserved Instance.
Can you cancel a Reserved Instance?
No, once you purchase a Reserved Instance, you cannot cancel it, but you can sell it on the AWS Reserved Instances Marketplace.
How does a Reserved Instance differ from Savings Plans in AWS Organizations?
Reserved Instances provide a capacity reservation and offer a significant discount on the hourly charge for an instance. Savings Plans, on the other hand, offer a discount based on your commitment to a consistent amount of usage, measured in dollars per hour, for a term of 1 or 3 years.
What happens to a Reserved Instance after its term expires?
After a Reserved Instance term expires, the reservation is automatically retired and the instances continue running, but billed at On-Demand rates.
Can you move a Reserved Instance between accounts in AWS Organizations?
You cannot directly move a Reserved Instance between accounts. However, if the account that purchased the Reserved Instance does not fully utilize it, the unused capacity can be used by other accounts in the AWS organization.
How can you track Reserved Instance utilization in your AWS Organization?
AWS provides Cost Explorer, a tool that provides visibility into your AWS costs and usage, including Reserved Instance Utilization and Reserved Instance Coverage reports.
Can you use a Reserved Instance purchased from the Reserved Instance Marketplace in AWS Organizations?
Yes, a Reserved Instance purchased from the AWS Reserved Instance Marketplace can be utilized in the same way as a Reserved Instance purchased directly from AWS, including being shared within an AWS Organization.
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