RIs Can Cost You More Than You Think

It's easy to buy Reserved Instances. Click a button, lock in the discount, move on with your day. Most people do exactly this. And most people end up overpaying.

Here's what happened with this one client.

They had over 200 Redis clusters on ElastiCache. The clusters were running. The bills were large. The obvious play - the one most consultants would recommend, the one AWS itself shows in its console - was to buy RIs. Lock in a lower rate on what you're already running, done.

I did something different. I spent three years on the AWS EC2 team doing cost optimization for large accounts before going independent. I know that buying RIs on clusters that are twice the size they need to be just locks in the overspending at a discount.

So I rightsized the clusters first. Then I converted almost all of them from Redis to Valkey. Only after both of those steps I bought the RIs - and only on about 80% of what was left, leaving room for more optimization later.

The sequence matters enormously here. If you rightsize after buying RIs, you've already committed to capacity you no longer need. If you convert engines after buying RIs, the reservations don't transfer. You end up paying for commitments that don't match your actual infrastructure.

Most cost optimization advice starts and ends with "buy RIs." But if you're committing to capacity you don't need, the discount doesn't help much.

My approach was the opposite: shrink first, then commit. I built two new tools for this - one for rightsizing and waste removal recommendations, one for mass-purchasing ElastiCache RIs based on Cost Explorer data. The RI purchasing tool is extensible to other services, but it's the last tool I reach for, not the first.

After rightsizing and the Valkey conversion alone, costs dropped from about $600 a day to roughly $140. The RI purchases shaved off another $45 a day, bringing the total below $100.

Confirmed savings: $86,000 a year on ElastiCache alone.

If we'd just done the RI purchases, which most people do and call it a day, we'd have missed most of the savings.

The lesson here isn't complicated. It's just that the obvious thing - buying RIs - becomes a much worse deal if you do it in the wrong order. Sequence is strategy. And the sequence most people follow is backwards.