Reserved instances allow for deep cost savings, and have various models to give you a balance between flexibility and cost savings. Here are a few pointers to get you going down the right path:

• Reserved instances have no distinguishing technical features compared to regular on-demand instances.
• Reserved instances are not a specific EC2 resource; rather, they are a billing construct that gives you a discount for continuous usage that matches the subscription.
• Put simply, purchasing a reserved instance entitles you to a discounted hourly rate on an on-demand instance that matches the properties of the reserved instance.
• The discounted hourly rate will be of varying size, depending on how much you pay up front. As a general rule, the more you pay up front, the higher the discount.

When you purchase a reserved instance, you're required to specify the following properties:

• Platform: Linux/Windows
• Scope: Region or Availability Zone
• Instance Type: For example, m5.large
• Tenancy: Shared or dedicated
• Offering Class: Standard or convertible
• Term: 1-12 months or 1-3 years
• Payment Option: No upfront, partial upfront, all upfront

We'll explore the ins and outs a little later in this section. For now, let's dive in and see how to make a purchase.