RI Coverage Reports: AWS Hits You With the Shame Stick

Today Amazon announced Reserved Instance coverage reports in an effort to simultaneously help you control your costs while feeling bad about your infrastructure.

At an implementation level this makes a lot of sense; define a percentage threshold for instance hours you want covered by reservations (a common number for initial baseline reservations is 70%), and highlight the deviation whenever you dip below that threshold. Many of my clients target a RI coverage rate above 90%-- which you can do once you have an accurate forecasting model, and automation that handles RI purchasing.

So far, this sounds great-- so where's the problem?

Stragetically, this continues to position AWS as a cloud computing environment where you need to plan your spending one or more years in advance. 

As they themselves say, one of the best aspects of AWS lies in its elasticity. You can have your baseline usage squared away, run a Super Bowl ad, scale to 1000x your typical volume, and then dial it back down as traffic ebbs, all in near realtime. That model's diametrically opposed to a CapEx centered world wherein you have to plan in advance what your usage is going to look like, and commit to 1 or 3 years at that capacity. (If you can do that accurately enough, the economic benefits of AWS become more unclear.)

As a result, if you don't know what your usage is going to look like in three months, AWS's approach to RIs begins to take on a darker tone, where the unstated message is "you're terrible at forecasting and should feel bad about that." 

Further, it will be interesting to see how many of the cost analysis vendors such as CloudCheckr, Cloudability, CloudDyn, and others respond to this move. I firmly believe that visibility into your AWS bill should be something that AWS provides natively, so moves like this one are definitely in the customer's interest. How this is going to impact areas of Amazon's partner ecosystem remain to be seen. 

If you have questions about this or other AWS billing topics, please email me-- I'm eager to hear your perspective!