Measuring Commitment Efficiency

The Two Commitment Metrics

Coverage measures what percentage of eligible on-demand spend is covered by a commitment discount. Utilization measures what percentage of purchased commitments are actually consumed. Both must be monitored. High coverage + low utilization means you over-committed and are paying for unused reservations. Low coverage + high utilization means you under-committed and are missing discount opportunities. The target is high coverage AND high utilization.

Diagnosing Commitment Problems

• Low utilization (<80%): Workloads were reduced, instance type changed, or the commitment was bought for a workload that was later decommissioned. Action: exchange convertible RIs or let the term expire and rebuy at the correct size.
• Low coverage (<60%): Too much on-demand spend on stable workloads. Action: analyze usage baseline and purchase additional commitments.
• High unused RI hours at end of month: Scope mismatch—a Regional RI is limited to one region while usage is spread across regions. Action: use flexible Savings Plans instead.
• Commitment utilization drops after an architecture change: Engineering teams changed instance types without coordinating with FinOps. Action: require FinOps review before instance type migrations.