RI Utilization vs RI Coverage: Difference Between these Amazon EC2 Reserved Instance Metrics

This article was written by Lois Dar Juan, a fresh graduate of BS ECE and current Junior Cloud Engineer of Tutorials Dojo. Motivated by his interest in engineering, Lois is keen on expanding his expertise and competency in cloud computing and the broader IT industry.

Amazon EC2 provides developers and businesses with the flexibility, high availability, and cost-efficiency needed to deploy applications without the burden of investing in physical hardware or servers. It serves as the backbone for various cloud-based operations, including application hosting, website deployment, and database management. To optimize costs, EC2 offers multiple Instance Purchasing Options tailored to different performance needs and budget constraints, including On-Demand Instances, Spot Instances, Reserved Instances, Dedicated Hosts, Savings Plans, and Capacity Reservations. While each option has its own advantages, this article focuses specifically on Reserved Instances (RIs) and highlights the key differences between two important RI metrics: RI Utilization and RI Coverage.

Utilization vs Coverage

Before exploring the specific definitions of these terms, it's important to first understand the general concepts of Utilization and Coverage. Utilization refers to the effective use of a resource, highlighting the gap between its full potential and its actual performance. In contrast, Coverage represents the extent to which a product or system includes or applies to a given area. But how do these concepts relate to Amazon EC2 Reserved Instances? They are directly connected, playing a crucial role in evaluating the efficiency and cost-effectiveness of RI usage.

RI Utilization vs RI Coverage

Reserved Instances (RIs) are a cost-effective Instance Purchasing Option that provides lower pricing compared to On-Demand instances while ensuring uninterrupted workloads for a commitment of one or three years. In essence, they offer significant cost savings in exchange for a long-term usage agreement. This arrangement allows AWS to efficiently allocate resources across its global user base. To monitor how effectively you are leveraging your RIs, AWS provides two key metrics: RI Utilization and RI Coverage. The following sections will define and differentiate these metrics in detail.

• RI Utilization measures how efficiently your Reserved Instances are being used by comparing your actual usage against the total hours they are available.
• RI Coverage represents the percentage of your total resource usage that is covered by Reserved Instances, including usage from other instance types such as On-Demand.

Although these terms may sound alike, their differences are straightforward. RI Utilization strictly measures how efficiently your Reserved Instances are being used, while RI Coverage assesses how much of your overall instance usage is covered by RIs. Both metrics are directly tied to your Amazon EC2 instance type. AWS provides insights into these metrics through RI Utilization and RI Coverage reports, which can be accessed via AWS Billing and Cost Management.

The AWS Billing and Cost Management

AWS Billing and Cost Management is a financial monitoring tool that helps users track their AWS cloud expenses. It offers statistical data and visualization tools to analyze usage patterns, enabling better cost and resource optimization. Within this tool, Reserved Instances have a dedicated section where users can review RI Utilization and RI Coverage metrics. To access these reports, navigate to AWS Billing and Cost Management, then select "Reservations" from the left-hand menu near the bottom. From there, you can view either the Utilization Report or the Coverage Report.

RI Utilization Report – AWS Billing and Cost Management

Above is an example of the RI Utilization Report interface. This report displays the cost of using Reserved Instances, the equivalent cost if using On-Demand instances, and the total net savings from choosing RIs (highlighted in green). Additionally, it shows the maximum potential savings when opting for RIs over On-Demand. The graph below represents the RI Utilization Report, which can be customized by adjusting the date range, linked account, region, instance type, and other filters on the right-hand side. The graph itself provides a clear visualization of whether your Reserved Instances are being fully utilized.

RI Coverage Report – AWS Billing and Cost Management

Above is an example of the RI Coverage Report interface. This report presents key details, including the Total On-Demand cost, annual potential savings, and the Average Coverage, which is a crucial metric. Unlike RI Utilization, this report immediately displays your RI Coverage without needing to refer to the graph. However, for better visualization, you can customize the graph below by adjusting the date range, linked account, region, availability zone, and other filters on the right-hand side. For example, an average coverage of 20% means that only 20% of your instances are covered by Reserved Instances, while the majority still run on On-Demand, highlighting an opportunity to optimize costs by increasing RI usage.

Computing for both RI Utilization and RI Coverage

What if AWS Billing and Cost Management is unavailable or there are no AWS services to provide data on RI Utilization and RI Coverage? No need to worry—you can manually calculate these metrics yourself with ease! Here’s how:

To calculate RI Utilization, use the following formula:

RI Utilization: (RI Usage Hours / Total RI Purchased Hours) x 100%

• RI Usage Hours: This refers to the total number of hours your Reserved Instances were actively in use during the specified reporting period.
• Total RI Purchased Hours: This represents the total hours your Reserved Instances were available, determined by multiplying the number of instances by the total hours in the reporting period.

To calculate RI Coverage, use the following formula:

RI Coverage: (RI Usage Hours / Total Instance Usage Hours) x 100%

• Total Instance Usage Hours: This represents the combined usage hours of all your EC2 instances, including both On-Demand and Reserved Instances.

To assess whether you are effectively utilizing your Reserved Instances, both RI Utilization and RI Coverage should ideally be close to or at 100%. A 100% RI Utilization indicates that all your Reserved Instances are being fully used, ensuring optimal efficiency. Meanwhile, a 100% RI Coverage means that your total instance usage is entirely covered by Reserved Instances, maximizing cost savings compared to On-Demand instances.

Importance of these Metrics

In summary, while RI Utilization and RI Coverage serve different purposes, both are essential for effective AWS resource management. For long-term workloads with cost efficiency in mind, Reserved Instances are a superior choice over On-Demand and other Instance Purchasing Options. By striving for higher values in both metrics, you can fully leverage the benefits of RIs, ensuring better cloud resource planning while maintaining financial flexibility for future optimizations.

* This newsletter was sourced from this Tutorials Dojo article.

* For more learning resources, you may visit: Free PlayCloud Guided Labs, Free AWS Digital Courses, and Free Practice Exams.