Cloud computing is the next big step in revolutionary technology, and Amazon Web Services (AWS) dominates the global market currently. 

Cloud computing is here to stay

According to various sources, Amazon Web Services has well over 1 million active enterprise customers. AWS has an extensive global cloud computing and storage network that spans across 190 countries, which is composed of over 52 AWS Availability Zones and more than 70 infrastructure services. AWS provides its excellent cloud computing and storage services to its million+ enterprise customers through 8,000+ partner network members and more than 1,900 third-party software products. 

The popularity of cloud computing, and AWS specifically, is clear when you take a look at some of the top brands that are AWS customers. There are thousands of globally renowned entertainment providers and big enterprises who are relying increasingly on cloud computing to provide their services. The biggest AWS enterprise customers, according to monthly spending, are Netflix (US$ 19 million), Twitch (US$ 15 million), LinkedIn (US$ 13 million), Facebook (US$ 11 million), Turner Broadcasting (US$ 10 million), BBC (US$ 9 million), Baidu (US$ 9 million), ESPN (US$ 8 million), Adobe (US$ 8 million) and Twitter (US$ 7 million).

What is a Convertible Reserved Instance?

Amazon Web Services offers “instances” which are virtual computing environments to users for deploying and testing applications on cloud servers. When users launch an instance, the type of instance will specify the hardware of the host computer. Each type of instance offers different levels of computing, memory and storage features. Instances which share similar computing configuration are classified under the same instance family.

Users can select the type of instance according to the application or software’s requirements. Amazon offers every instance with a fixed amount of CPU power, irrespective of the hardware being used. Hence, before making your choice, consider the following factors in making the decision:

  • Computing power required
  • Availability Zone or Region 
  • Memory needed
  • Networking prowess 
  • Storage capacity 
  • Price 

Amazon Web Service’s Convertible Reserved Instances (RIs) are immensely popular among the small, middle-sized and huge enterprises that use the AWS cloud computing services. AWS offers its RIs in two different classes, standard and convertible.

Let’s take a look at both:

Standard Reserved Instance (RI)

AWS offers the standard RI through the one-year or the three-year term purchase plans. AWS Standard RIs allow users to modify the scope, type of networking, Availability Zone and the type of instance (as long as the new instance is within the same instance type). Users can also choose to sell AWS Standard reserved instances in the Reserved Instance Marketplace offered by AWS.

Convertible Reserved Instance (RI)

AWS offers the convertible reserved instances (RIs) through two plans – the one-year or the three-year term plans. AWS Convertible RIs allow users to replace one or more convertible reserved instances for another convertible RI. The two reserved instances can share the same configuration or have different instance families, tenancy and operating systems. 

There are no restrictions to the number of times that you can exchange the RIs, provided that the target convertible reserved instance has an equal or higher value than the original convertible RI which it replaces. 

What are the Benefits of using AWS Convertible Reserved Instances (RIs)?

There are several situations when purchasing an AWS convertible RI is useful, such as when:

  • The purchased reserved instances are in the payer account, and not in the sub-account. This allows you to easily alter Convertible RIs to meet the evolving requirements of your enterprise. 
  • You forecast changes in workloads. In such an event, a Convertible RI helps you to be prepared for the growing and changing requirements of your organization and provides the relevant discounts and capacity reservations. 
  • You wish to prepare for an inevitable drop in price in the future.
  • You wish to avoid consulting teams for your capacity planning and predicting. 
  • You believe your computing requirements to remain stable throughout the term plan.


How to exchange Convertible Reserved Instances?

Amazon allows users to exchange their Convertible RIs only under the following conditions:

  1. Customer is active
  2. The customer does not have a pending exchange request from earlier 

If you wish to exchange one Convertible RI for another, then you should be aware of the following rules:

  1. Convertible RIs can only be exchanged for another Convertible RI currently offered by AWS.
  2. Convertible RIs are limited to a specific region for the duration of the reservation. Convertible RIs cannot be exchanged for another from a different Region. 
  3. One convertible reserved instance can be exchanged for one or more Convertible RIs. 
  4. Users can also split a portion of Convertible RIs, modify it into multiple reservations and then exchange single or multiple reservations for a new Convertible RI. 


Hopefully, the article helped you to understand the basics of AWS Convertible RIs so you can make the best choice before buying an instance type from Amazon next. 

EC2 Reserved Instance Pricing


Steve is a product-marketer and Engineer at Cloudysave who works with Cloud Management and Adoption team. Over the past years, he has collaborated with multiple teams to provide a robust and cost-effective architecture patterns to influence business and engineering decisions. His key areas of interests include Cloud Costs Management, Security and DevOps Best-Practices.