Master reserved capacity vocabulary: RIs, committed use discounts, savings plans, coverage vs utilisation rates.
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What is the key difference between a 'standard RI' and a 'convertible RI' on AWS?
Standard RIs offer up to 72% discount but lock you to a specific instance type. Convertible RIs offer up to 66% discount but allow exchanges to different instance families, sizes, or OS — useful when workloads evolve.
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A FinOps report says 'we're 67% covered by reservations'. What does 'coverage rate' measure?
Coverage rate measures the proportion of eligible usage that is covered by commitments (RIs or Savings Plans). 67% coverage means 33% of usage is still paying on-demand prices, indicating an opportunity to purchase more reservations.
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What is 'RI utilisation rate' and why does it matter?
RI utilisation rate measures how much of your committed reservation is actually being consumed. Low utilisation (e.g. 40%) means you're paying for reserved capacity that sits idle — wasted spend that should trigger rightsizing or selling unused RIs on the marketplace.
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What is the difference between AWS 'Savings Plans' and 'Reserved Instances'?
Savings Plans offer flexibility — you commit to $/hour spend and get discounts across EC2, Fargate, and Lambda regardless of instance type or region. RIs are more rigid but can offer slightly higher discounts for stable, well-defined workloads.
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What are 'Committed Use Discounts' on Google Cloud Platform?
GCP's Committed Use Discounts (CUDs) give up to 57% discount on Compute Engine in exchange for a 1-year or 3-year commitment to a specific amount of vCPUs and memory in a region — similar to AWS RIs but resource-based rather than instance-based.