AWS Convertible Reserved Instances: The Ultimate Guide

 (RIs) allow you to commit to using specific AWS compute resources for a 1-year or 3-year term, offering savings up to 75% compared to On-Demand pricing. They are similar to , but Savings Plans (SPs) provide broader flexibility across instance types, operating systems, and regions. Reserved Instances are more targeted and work best for fixed, predictable workloads. For more about how RIs and SPs work and how to combine them as part of a broader cost-saving strategy, you can check out the .

There are two types of RIs:

• Standard RIs: Offer the highest discounts, but you’re locked into your choice of instance type, operating system, and region for the duration — if your infrastructure changes, tough luck! You can resell unneeded RIs on the RI marketplace , but there are restrictions — you can’t sell them during the first and last 30 days of the term, or if they were originally purchased under a discount program.
• Convertible RIs: Offer slightly lower discounts (up to 68%) but offer the flexibility to change the nature of the commitment while retaining the original expiration date. You can exchange a CRI for one with a different configuration, as long as it has an equal or higher value.

Convertible Reserved Instances allow you to maximize your savings on AWS while minimizing your financial risk. In this article, we’ll explain what Convertible RIs are, how and when to use them, as well as advanced strategies for getting the most out of your discounts when it comes to both cost savings and flexibility.

What Are Convertible Reserved Instances (CRIs), the Marvelous AWS Shapeshifter

Let’s simplify Convertible RIs by thinking of them as a flexible cloud subscription that grows with your needs. Imagine you start off small, like renting a compact car for a road trip. As more people join your journey, you trade up to a spacious SUV or even a bus, without needing to cancel your original booking or start over.

This is analogous to a business that initially starts small, such as a startup with limited traffic using t3.medium instances. As the startup scales up due to growing customer demand, they can exchange their Convertible RIs for more powerful m5.large instances. Similarly, a large enterprise with seasonal workloads can adapt Convertible RIs to match peak traffic periods by switching instance types to scale up and down. This flexibility allows the business to meet evolving needs while maintaining cost efficiency.

Key Point: Even when you “convert” or exchange your RI, it retains its original expiration date. This means the term (e.g., 3 years) doesn’t reset after an exchange—it keeps ticking from the date you first bought it ( unless you “squish” it — we’ll cover this later in the article). This is part of what makes Convertible RIs so valuable.

Smart Strategies for Using Convertible RIs

Let’s talk about a few real world scenarios in which leveraging Convertible RIs can be extremely advantageous.

1. Adapting to Traffic Spikes

Workloads often experience fluctuating traffic patterns, whether driven by seasonal demand, marketing campaigns, or external factors. Whether you need to scale up or scale down, Convertible RIs let you adjust reserved capacity to accommodate changing needs, ensuring cost savings while maintaining performance during high-traffic periods. (This is the primary advantage over Savings Plans, which lack this flexibility).

2. Accommodating Future Workload Changes

Workload requirements evolve—whether through scaling, architecture changes, or new applications. Convertible RIs allow you to adjust instance sizes, types, or other configurations over time, ensuring flexibility even as your needs shift.

3. Operating System Transitions

Switching workloads from Windows to Linux—or vice versa—often occurs during cost or architecture optimization initiatives. Convertible RIs provide the flexibility to adjust your reservations for a new operating system, avoiding any unnecessary costs during these transitions.

4. Consolidating Workloads onto Newer Instance Types

As AWS continues to release newer, more efficient instance families, Convertible RIs allow you to upgrade without losing your reserved pricing. For example, transitioning from M5 to M6i instances can provide better performance and lower costs while retaining your original commitment.

How to Harness the Full Power of Convertible RIs: Seeding and Evolving

Now let’s talk about the most powerful way to maximize cost savings and flexibility with your CRIs.

Seeding Convertible RIs

How to Buy and Exchange Convertible RIs: A Step-by-step Guide

Convertible RIs work like planting seeds that grow into the infrastructure you need over time. Seeding refers to starting with smaller or less expensive Convertible RIs (like t3.medium instances) to lock in cost savings while leaving room to grow. Later, as your workload evolves, you exchange these “seeds” for larger or more powerful instances (like m5.large or m5.xlarge). Once your initial seeds are in place, leverage their flexibility to align with changing workloads. For example:

• Inflating Commitments: As your usage grows, exchange smaller instance types for larger ones to meet demand without wasting prior investments.
• Squishing Commitments: Combine multiple RIs with different expiration dates to lower hourly commitments while extending coverage periods.
• Balancing Coverage: Rebalance surpluses and deficits across instance families and regions to minimize costs and maximize usage.

Let’s take a step back and ask: why do companies move to the cloud?

The whole point of the cloud is scalability and flexibility. Businesses moving to the cloud cite the ability to scale dynamically and reduce upfront costs as key drivers. For example, a retail business can handle seasonal spikes during the holiday season without investing in on-premises infrastructure.

The cloud offers businesses the flexibility to adapt their resources while maintaining cost efficiency, ensuring they only pay for what they need as their workloads evolve. On the other hand, traditional on-premises infrastructure often requires significant upfront capital expenditure and lacks the ability to scale dynamically.

Convertible RIs align perfectly with these motivations. They enable businesses to retain cost savings while maintaining the flexibility that drives cloud adoption.

Now let’s talk about how to actually do it via the AWS console and via automation.

Manage Convertible Reserved Instances via the AWS Console

Say that you run a machine-learning application on m5.large instances in the us-east-1. You commit to a 3-year Convertible RI for cost savings. A year later, your application scales and now requires c5.xlarge instances.

Example Step-by-Step:

1. Check the Value of Your Current RI: AWS calculates the value of your existing Convertible RI based on its term and payment type.
2. Determine New Requirements: Identify the instance type, size, and operating system you need.
3. Exchange via the AWS Console:
   • Go to the Reserved Instancessection in the AWS Management Console.
   • Select your existing RI and choose “Modify Reserved Instances” or “Exchange Reserved Instances.”
   • Specify the new RI attributes.
4. Adjust the Payment: If the new RI’s value exceeds your current RI’s, you’ll pay the difference.

The outcome? Your Convertible RI seamlessly adapts to your new requirements, giving you the best of both worlds: cost savings and flexibility.

Automatically Manage CRIs

Automating the management and exchange of Convertible RIs can significantly enhance their value. AWS Marketplace offers tools like nOps that can automate tracking and exchanges, ensuring businesses are always optimizing costs. For example, these tools can monitor usage patterns, predict future requirements, and automate the RI exchange process via AWS APIs. 

Here are the benefits of letting nOps manage your CRIs:

• More Cost Savings: Intelligently analyzes usage patterns and selects optimal exchanges based on workload changes, ensuring you’re always leveraging the best configuration for your needs.

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• Less Management Overhead: integrating with AWS APIs, automation platforms can fully manage the exchange process, reducing human error, guesswork, and time spent figuring out pricing plans — freeing your team to focus on building and innovating
• 100% Visibility: Understand exactly how much you will save with nOps and get continuous realtime visibility into your realized savings at any time.

Ensuring your Convertible RIs are continuously optimized across your organization is prohibitively complex and time-consuming — on the other hand, it’s a breeze with nOps.

nOps was recently ranked #1 with five stars in G2’s cloud cost management category, and we optimize $1.5+ billion in cloud spend for our customers.

Join our customers using nOps to maximize your commitment savings and leverage automation with complete confidence by  with one of our AWS experts.