Amazon EC2 Reserved Instances and Other AWS Service Reservation Models
AWS Whitepaper

Consolidated Billing

The pricing benefits of Reserved Instances are shared when the purchasing account is billed under a consolidated billing payer account. The instance usage across all member accounts is aggregated in the payer account every month. This is useful for companies that have different functional teams or groups; then, the normal Reserved Instance logic is applied to calculate the bill.

AWS Organizations is an account management service that lets you consolidate multiple AWS accounts into an organization that you create and centrally manage. AWS Organizations includes consolidated billing and account management capabilities that enable you to better meet the budgetary, security, and compliance needs of your business. For more information, see What Is AWS Organizations?

For more information on consolidated bills and how they are calculated, see Understanding Consolidated Bills.

Reserved Instances: Capacity Reservations

AWS also offers discounted hourly rates in exchange for an upfront fee and term contract. Services such as Amazon EC2 and Amazon RDS use this approach to sell reserved capacity for hourly use of Reserved Instances. For more information, see Reserved Instances in the Amazon EC2 User Guide for Linux Instances and Working with Reserved DB Instances in the Amazon Relational Database Service User Guide.

When you reserve capacity with Reserved Instances, your hourly usage is calculated at a discounted rate for instances of the same usage type in the same Availability Zone. When you launch additional instances of the same instance type in the same Availability Zone and exceed the number of instances in your reservation, AWS averages the rates of the Reserved Instances and the On-Demand Instances to give you a blended rate.

Blended Rates

A line item for the blended rate of that instance is displayed on the bill of any member account that is running an instance that matches the specifications of a reservation in the organization.

The master account of an organization can turn off Reserved Instance sharing for member accounts in that organization via the AWS Billing Preferences. This means that Reserved Instances are not shared between that member account and other member accounts. Each estimated bill is computed using the most recent set of preferences. For information on how to configure sharing, see Turning Off Reserved Instance Sharing.

Regional vs. Zonal Reserved Instances

Standard and Convertible Reserved Instances can be purchased to apply to instances in a specific Availability Zone (Zonal Reserved Instances) or to instances in an AWS Region (Regional Reserved Instances).

The following table summarizes the differences between Reserved Instances purchased for an Availability Zone and for a Region.

Zonal Reserved Instance Regional Reserved Instance
Provides a capacity reservation Does not provide a capacity reservation
Applies only to the specified Availability Zone for the duration of the contract Applies to usage in any Availability Zone in the Region
Applies only to instances of a specific size within a given instance family For Reserved Instances on the Linux or Unix platform with default or shared tenancy; applies to instances of any size within a given instance family (referred to as instance size flexibility)