AWS SP/RI policy changes
In a significant move, AWS announced policy changes to the use of Reserved Instances (RIs) and Saving Plans (SPs), which are set to take effect on June 1, 2025. These changes are particularly crucial for MSPs, resellers, and other organizations that rely on shared RIs and SPs to manage cloud costs.
What is the update?
Under the new policy, AWS will require that RIs and SPs be utilized by a single end customer. This means MSPs and resellers will no longer be able to purchase RIs or SPs in a centralized account and distribute the benefits to multiple end customers. Each end customer will now need to manage their own commitments directly to take advantage of discounted pricing.
While this update does not affect individual organizations that already manage their own RIs and SPs, it marks a significant shift for those who rely on shared commitment models through third parties.
Why is AWS implementing this change?
AWS’s move aims to:
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Increase transparency: By requiring RIs and SPs to be tied to a single end customer, AWS ensures clearer tracking and billing.
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Reduce abuse: Centralized management of RIs and SPs by resellers sometimes leads to practices that AWS likely views as inconsistent with their pricing models.
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Encourage direct engagement: AWS may be encouraging more customers to directly interact with their platform for greater control and management of cloud costs.
Who will be impacted?
This policy change has far-reaching implications for:
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MSPs: They will need to transition away from shared RI/SP models and re-evaluate their offerings.
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Resellers: Businesses distributing AWS cost savings through centralized commitments will face challenges in maintaining customer relationships.
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CXOs and FinOps practitioners: These stakeholders must reassess financial strategies and cost optimization plans.
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Cloud architects: They will need to adjust infrastructure planning to align with customer-specific RIs and SPs.
The impact of the policy change
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Operational complexity: MSPs and resellers must overhaul their cost-sharing models, increasing the complexity of operations.
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Customer frustration: End customers accustomed to managed savings may face a steep learning curve in directly handling RIs and SPs.
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Cost uncertainty: Without proper tools and strategies, customers risk under-utilizing commitments or overspending.
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Disruption in business models: Resellers may struggle to differentiate their offerings, potentially losing customers to direct AWS engagement.
How tools like CloudSpend reduce the impact
Transitioning to a model where each end customer directly manages their RIs and SPs is no small feat. A few years back, IT teams could argue that a third-party cloud cost management tool is a luxury. Today, with ever increasing cloud costs, this is a necessity. CloudSpend offers MSPs and resellers a way to smooth the transition and maintain value for their customers.
Key benefits of CloudSpend:
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Cost visualization: CloudSpend provides a clear, detailed view of RI and SP usage across accounts, making it easier to identify and allocate costs effectively.
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Get recommendations: By analyzing usage patterns, CloudSpend offers actionable recommendations for purchasing and managing RIs and SPs, ensuring customers don’t over-commit or underutilize cloud tools.
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Simplified billing: The platform consolidates billing and reporting, allowing MSPs to create tailored billing solutions for their customers even under the new policy.
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Proactive alerts: CloudSpend’s budgeting/anomaly alerts ensure no surprises, notifying users of anomalies or approaching thresholds in RI/SP utilization.
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Enhanced customer insights: MSPs can provide customers with detailed cost breakdowns and optimization tips, maintaining their role as trusted advisors despite the policy changes.
The upcoming AWS policy changes in 2025 mark a significant shift in how RIs and SPs are managed. While the new rules aim to enhance transparency and reduce abuse, they also create challenges for MSPs, resellers, and their customers. As we approach the June 2025 deadline, early preparation and strategic planning will be key to thriving in this new landscape. Start exploring CloudSpend today or request a demo today to prepare better for your AWS cost management challenges.
