Reserved vs On-Demand Savings Calculator
Is a reserved or committed-use discount worth it for your usage?
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Reserved vs On-Demand Savings Calculator by TheCalcTools
How the Reserved vs On-Demand Savings Calculator works
Enter the on-demand hourly price, the discount for committing, and the share of hours the instance will actually run.
A commitment is paid for every hour, whether or not it is used. On-demand is paid only for the hours used.
The break-even usage is where the two costs are equal.
The formula
Worked example
Using the default values shown in the calculator:
| On-demand price per hour | $0.2 |
|---|---|
| Commitment discount (%) | 40 |
| Expected usage (% of hours) | 70 |
| Number of instances | 10 |
- On-demand at 70% usage: $0.20 × 730 × 0.7 × 10 = $1,022.00.
- Committed at 40% off: $0.12 × 730 × 10 = $876.00.
- Saving: $146.00 a month. Break-even usage is 60%.
Result:
| On-demand cost per month | $1,022.00 |
|---|---|
| Committed cost per month | $876.00 |
| Monthly saving (negative = loss) | $146.00 |
| Break-even usage | 60.0% |
Frequently asked questions
What if my usage is uncertain?
Commit only to the steady baseline you are confident about and leave spikes on demand.
Do all providers price commitments this way?
Most reserved-instance and savings-plan models bill the commitment hourly regardless of usage, but terms differ. Check your provider’s rules.
Sources and further reading
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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.