AWS Implements RI Policy Change: What you need to know

Introduction

AWS has announced a new policy that will affect organizations that rely on reselling discounted Reserved Instances (RIs). Starting on January 15, 2024, AWS will block some customers from reselling their unused discounted RIs. This enforces their contract terms for resale via the RI Marketplace. In this blog, we will discuss the details of this policy change and how it may impact your organization’s operations.

Furthermore, it’s essential to note that last year, AWS introduced a new restriction on trading RI volumes. These limits apply to the lifetime of your AWS account, not on an annual basis.

• You can sell up to $50,000 worth of Reserved Instances.
• You can sell up to 5,000 Reserved Instances.

These limits typically can’t be increased, but will be evaluated on a case-by-case basis if requested.

The Ban on Discounted RI Resale 

The ban on reselling discounted RIs is part of Section 5.6.1 of the AWS service agreement. This ban specifically targets customers who buy Reserved Instances at discounted rates through the Amazon EC2 Reserved Instance Marketplace. This limit has been in the contract terms for many years but will now be enforced. To help with the transition, AWS is allowing customers to continue reselling discounted RIs that were bought before October 1, 2023, until the January 15th deadline.

The Purpose Behind the RI Resale Ban

Discounted RIs occur through either volume discounts or pre-payment of RIs under a private pricing agreement. AWS is blocking reselling discounted Reserved Instances (RIs) because some resellers and businesses were gaining access to highly discounted RIs that they should not have, and therefore reducing their costs beyond the expected levels. The ban stops this activity so that the AWS ecosystem stays fair and honest.

How Strategic Blue can help

At Strategic Blue, we use all the commitment products to establish a comprehensive layered approach, blending multiple products to create a rate optimization strategy for minimizing cost while retaining maximum flexibility. 

While we can use RI purchases and sales, our multi-commitment strategy means that we are not significantly impacted by this change, and can limit sales to non-discounted RIs for our customers.

Conclusion 

As AWS bans the resale of discounted Reserved Instances, organizations need to adjust their strategies to comply with these new policies. This may be a challenge for companies heavily using the buying and selling of RIs to control their AWS cloud costs. Strategic Blue is not significantly impacted by this policy.