Reserve the baseline, burst on-demand
Commitments save ~40–60% but only on always-on capacity. Reserve your steady floor, not your spikes. For the flip side of cheap-but-interruptible capacity see the spot instance savings calculator.
Reservations: discount versus flexibility
One-year reserved instances discount 30–40% off on-demand; three-year commitments reach 60%. The trade is optionality: a reservation on an instance family you migrate away from in month eight becomes dead spend. Convertible RIs and Savings Plans lower the discount a few points for exchange flexibility — nearly always the right call given how fast workloads change. The utilization break-even: a standard 1-year RI at 35% discount pays for itself if the instance runs above ~65% of the year. Anything spiky or experimental belongs on spot or on-demand; reservations are for the boring baseline you can name twelve months out.