Cloud cost glossary

Reserved instance

Also known as: RI

A reserved instance is a 1- or 3-year commitment to a specific instance configuration in exchange for a large discount (up to ~72%) versus on-demand pricing.

Reserved instances trade flexibility for price. You commit to a particular family, size, and region for the term, and pay less per hour — with the steepest discounts for 3-year, all-upfront commitments. They suit steady, predictable baseline workloads.

On AWS, Savings Plans have largely superseded classic RIs for compute because they offer similar discounts with more flexibility. The trade-off is the same either way: commitment depth versus discount size.

Reserved vs spot vs on-demand →

Related terms

Put the theory to work

Estimate and compare cloud costs across AWS, Azure, GCP, DigitalOcean, Hetzner, and Vultr with the free SpendArk calculator — no signup required.

Open the cloud cost calculator →

Part of the SpendArk cloud cost & FinOps glossary.