The Reserved Instances are a complement to Amazon's On-Demand Instances. Instead of just paying for what they use Reserved Instances give enterprises the option to make a one-time payment for each instance they want to reserve and in return receive a discount on the hourly charge for that instance.
There are three Reserved Instance types (light, medium, and heavy utilization) that allow enterprises to balance the amount they pay upfront with the effective hourly rate, according to Amazon. Enterprises also get to choose between 1-year or 3-year terms and a number of different performance levels.
For example, the one-time fee for a small instance with light utilisation is US$69 when signing a 1-year term and $106.30 when paying for a 3-year term. The corresponding hourly rates are from $0.099 and $0.091. The on-demand cost for a small instance is from 0.140 per hour.
Reserved Instances are also eligible for volume discounts, which can save enterprises an additional 10 percent when they spend more than $250,000 on Reserved Instances or an additional 20 percent when they spend more than $2 million, according to Amazon.
RHEL Reserved Instances are available with versions 5.5, 5.6, 6.0, and 6.1 of the operating system, both in 32-bit and 64-bit architectures, and in all regions except the AWS GovCloud, according to Amazon.
Reserved Instances can be purchased for running SUSE Linux, Microsoft Windows Server and Microsoft SQL Server on Amazon's cloud, as well.