Amazon offers Reserved Instances

Amazon announced today the availability of Reserved Instances. Basically, you pay a one-time fee and get a significant discount on the hourly rate for that instance.
Their rates are available here.
After doing some calculations on it, I figured out the break even point between the old “On-Demand Instances” and the new “Reserved Instances.”
For the current 1 year term, the break-even point is 193 days. For the 3 year term, the break even point is 298 days. So basically, if you’re going to be running a particular instance for much more than a year, you should probably sign up for the 3 year term.

Here’s a brief comparison of the year by year costs for a small instance. I’ve only listed the small instance type since the costs for the other instance types are all proportional (e.g. large is 4x and xlarge is 8x.)

1st year costs 2nd year costs 3rd year costs 3 year Total
On Demand $876.00 $876.00 $876.00 $2,628.00
1 year term $587.80 $587.80 $587.80 $1,763.40
3 year term $762.80 $262.80 $262.80 $1,288.40

(I’m not sure why the spacing is so funky on this post with a table in it.)