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When purchasing reserved instance, I had to choose availability zone (1 out of 3). In our Cloud Formation template we don't specify availability zone (seems like a right thing to do in case one AZ goes down). So what happens when spawned EC2 instance AZ doesn't match purchased reserved instance AZ?

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Reserved Instances simply work as DISCOUNT coupon / Offer in the super-market.

Example : If the Offer Says, buy 2 units of Product A and get one Product B absolutely Free. So you look into the offer and take 2 units of Product A and one Unit of Product B. During the billing as well, the Point of Sales Person also doesn't look into each and every product and try to check it offers; rather he or she directly keeps scaning each and every product against the bar-code scanner and that't it - when these 3 are scanned, the price for Free-Product is automatically reversed.

So similarly, you buy the Reserved Instance (Coupon) choosing the AMI, Region, AZ, Duration etc. You would do all your tech stuff as usual like deploying, patching, monitoring etc. During the billing, if the instance(s) you launched matches the Reserved Instance, then the Reserved pricing would be applied; if not that would be charged at 'On-Demand-Pricing'.

So the bottom line to answer your question is if your AZ doesn't match, you will not be using the benefit of Reserved-Instance pricing and be charged with On-Demand-Pricing. Also you will be wasting the investment done for the Reserved-Instance

PS :

  1. If you don't specify and AZ means AWS would choose any AZ. This has nothing to do with HA
  2. The Revered-Instance coupon concept works exactly the same as in the super-market example. Say you have purchased 5 reserved instances, but you have launched 6 instance, you will be paying the 6th instance in the on-demand-pricing
  3. Reserved Instances are purely a Billing Concept and it wouldn't affect or effect the tech aspects of your instance
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  • Thank you for the detailed answer. My conclusion is to specify exact AZ in CloudFormation template and make sure Reserved instances are ordered for the same AZ. – arnaslu Jun 18 '14 at 7:20
  • That's the correct approach ... well I will put that as the right direction – Naveen Vijay Jun 18 '14 at 7:53

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