[alex_young]

The notion that the break even point is 70% is ignoring some really important stuff.

If you reserve workload x on hardware y for n years, you're effectively strapping yourself into a sure-to-be-obsolete and more expensive platform which you'll have to then move off of at an arbitrary point n years in the future.

If you don't move, you wind up paying a premium to be stuck with the obsolete / more expensive platform just to avoid the cost of migration.

RIs are a lock in.

[koolba]

It's not a total lock-in as if you get convertible instances you can change the underlying instance type.

[hinkley]

I wonder how this is better than buying hardware. Some of the same problems but more flexibility than RI.

[vidarh]

It's not unless you depend on a huge amount of other AWS services. Buying hardware and colocating - or even paying month to month to rent servers from a dedicated hosting provider will typically be much cheaper than reserved instances.

[wongarsu]

Which is likely the reason AWS bandwidth charges are so high. That's their lock-in factor that often makes it infeasible to use cheaper servers elsewhere as long as anything else is on AWS.

[mathattack]

You’re also locking in to outdated prices. Moore’s law is at your back with cheaper prices every year.

[rohan404]

Not quite - the outdated price issue certainly exists for standard AWS RIs, however if you purchase convertible RIs then price reductions are applied.

Also bear in mind that the savings you get from RIs will generally outweigh the reduction in price of the instance.

[mathattack]

My experience hasn’t been so black and white. There is still a trade-off on giving up flexibility, which is one reason to move to the cloud. When I modeled it out (3 years ago for AWS, more recently for Microsoft) the one year commit struck the best balance between cost and flexibility.

There is one truism: cloud costs always seem to grow faster than revenue. :-)

[sonnyblarney]

I don't see how arbitrary AWS instances are in any way going to go 'obsolete'. They have been around for a decade and are becoming more and more normative.

Second, the underlying financial principle is that with visibility comes lower volatility comes lower cost - that's some very basic financial logic that's at play here.

Yes, of course the contract implies a degree of vendor lock-in, but this is inherent in the nature underlying operational costs.

"RIs are a lock in." - of course. And if you don't want to be locked in, then you're going to have to pay a lot more: AWS, GCC it doesn't matter, it's the same financial reality everywhere.

[taormina]

No, the GP is referring to things like c3 vs c5 families. When you're locked into the 3 year old hardware, you have to pay the cost of upgrading eventually.

[sonnyblarney]

First - that 'lock in' is very evident by the nature of the contract.

Second - because newer things are available, it does not mean that others become 'obsolete' in three years by any means.

The vast majority of business do not need to have access to the latest, specific version of what are essentially commodity bits of hardware and software.

It's not really a risk for most businesses, and if it is, then obviously they can pay a higher price for the volatility inherent in switching at any time if they so chose.

[bscanlan]

Note that AWS offer convertible reservations, and this is what Stripe say they use in the article.