Reserved vs On-demand Break-even Calculator

Commitments can lower hourly rates but may include upfront payments. Compare baseline vs peak usage to see payback sensitivity.

Inputs

On-demand ($ / hour)
~$87.55 / month at current schedule.
Committed ($ / hour)
~$54.72 / month at current schedule.
Upfront cost ($)
Hours/day
Days/month
Use 30.4 for an average month.
Monthly hours: 730
Scenario presets

Results

Hourly savings
$0.05 / hr
Break-even usage
6,667 hours
At current schedule: 9.14 months
Monthly on-demand
$87.55
Monthly committed
$54.72
Monthly savings (excluding upfront)
$32.83

How to get your inputs

  • Inputs: use billing exports, metrics, or logs to get real counts/GB where possible.
  • Units: convert throughput (Mbps) or rates (RPS) into monthly units when needed.
  • Scenarios: build a baseline and a high-usage scenario to avoid under-budgeting.

Result interpretation

  • Break-even depends on utilization; lower utilization pushes payback out.
  • If break-even is longer than your expected lifetime, keep on-demand.

Common mistakes

  • Using a single average and ignoring peak/incident scenarios.
  • Double-counting or missing adjacent line items (transfer, logs, retries).

Scenario planning

Scenario Hours/day Days/month Payback
Baseline Expected Normal Months
Peak High Same Faster

Validate after changes

  • Compare your estimate to the first real bill and adjust assumptions.
  • Track the primary driver metric (requests/GB/count) over time.

Next steps

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Example scenario

  • On-demand $0.12/hr vs committed $0.075/hr with $300 upfront -> estimate break-even hours.
  • Peak 220% scenario highlights faster payback when utilization spikes.

Included

  • Break-even usage estimate from hourly savings and upfront cost.
  • Monthly savings estimate excluding upfront (for planning).
  • Baseline vs peak scenario table for usage shifts.

Not included

  • Term length, discount rate, and flexibility risk (use a full ROI model for decisions).
  • Provider-specific commitment utilization constraints.

How we calculate

  • Hourly savings = on-demand hourly - committed hourly.
  • Break-even hours = upfront / hourly savings (if savings > 0).
  • Monthly savings = hourly savings x (hours/day x days/month) (excluding upfront).

FAQ

What if committed hourly is higher than on-demand?
Then there is no break-even: the commitment is not cheaper under the assumptions provided.
Does this include partial upfront or term length?
No. This is a simplified break-even estimate. For a full ROI model, incorporate the term, discount rate, and flexibility risk.
What should I use for hours/day and days/month?
Use hours/day and days/month (24 x 30.4 is a common always-on baseline). For non-24/7 workloads, set hours/day to your expected billable time.

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Disclaimer

Educational use only. Not legal, financial, or professional advice. Results are estimates based on the inputs and assumptions shown on this page. Verify pricing and limits with your providers and documentation.

Last updated: 2026-01-29