# What is Commitment Automation? Cloud commitments save companies 30–70% on their cloud bills compared to on-demand pricing. They also require making a bet on the future: that you'll be running the same services, at roughly the same scale, for the next 1–3 years. Most organizations can't make that prediction with confidence. Infrastructure changes with business needs. Teams migrate services. Instance families get replaced by newer ones. Companies get acquired or divest divisions. Two techniques — commitment laddering and convertible RI exchange — were developed specifically to reduce this exposure. A category of commercial tools was built around automating them. Archera includes both as free platform capabilities. *** ## Commitment Laddering ### The problem When you buy a 1-year Reserved Instance today, 100% of your commitment risk concentrates at a single renewal date 12 months from now. If your infrastructure has changed by then, you face a choice: renew at terms that no longer fit your workload, or exit the commitment and lose unused savings. Worse, many organizations don't buy commitments incrementally — they do a periodic "sweep" and commit a large portion of their infrastructure all at once. This creates a cliff: a moment in the future when a large block of commitments expires simultaneously and every prediction you made 12 months ago gets stress-tested at once. ### What laddering does Commitment laddering distributes purchases across time so that commitment expirations are staggered rather than clustered. Instead of buying 100 EC2 RIs with a 1-year term in January, you might purchase 25 per quarter — so expirations fall in January, April, July, and October of the following year. This accomplishes several things: * **Continuous renewal opportunities**: At any given time, a fraction of your commitment portfolio is expiring soon, giving you regular windows to adjust coverage up or down * **Reduced concentration risk**: No single renewal event can expose you to large unexpected costs * **Compounding flexibility**: Short-term adjustments compound over time into a portfolio that more accurately reflects your actual infrastructure Automated laddering tools monitor your commitment portfolio continuously and make incremental purchases on a configurable cadence — daily, weekly, or monthly — maintaining a staggered expiration profile without manual oversight. *** ## Convertible RI Exchange Automation ### The problem AWS Convertible Reserved Instances offer a specific benefit: they can be exchanged for different instance types, sizes, operating systems, or tenancy configurations before they expire. This is designed to protect buyers against instance family obsolescence — if you committed to an older-generation instance and your workload migrated to a newer one, you can exchange rather than absorb a loss. The catch is that executing exchanges manually is operationally intensive. You need to monitor which Convertible RIs are currently applied versus idle, track which running instances have no coverage, and identify exchange opportunities that would improve coverage without reducing discount rates. At any meaningful scale, this is a continuous background task. ### What exchange automation does Convertible RI exchange automation continuously reconciles your running instance portfolio against your held Convertible RI inventory. When your workload shifts — a service migrates from `m5` to `m6i` instances, a team adopts a different operating system, or EC2 fleet composition changes after an autoscaling event — the tool proactively exchanges held RIs to match the new configuration. This keeps your discount coverage aligned with your actual usage without requiring manual exchange workflows or periodic audits. *** ## Why a Vendor Category Was Built Around These Commitment laddering and convertible exchange automation are powerful but operationally complex. Both require: * Continuous ingestion of usage data from cloud billing APIs * A commitment inventory model that tracks every held RI, its term, expiration, and current utilization * Logic to identify and execute optimal purchase or exchange actions * Guardrails to avoid over-committing or triggering adverse exchange terms Building and maintaining this infrastructure is non-trivial. Several commercial tools were built specifically to provide this capability as a managed service: {% hint style="info" %} **Tools in this category include**: ProsperOps (Adaptive Laddering™, Convertible RI Exchange), Spot Eco by NetApp (Layering, Seeding), nOps (Continuous Rebalancing), Harness Cloud Cost Management (Commitment Orchestrator), and Zesty (Dynamic Commitments), among others. Most charge a share of the savings they generate on your behalf. {% endhint %} These tools do real work. Automated laddering and exchange can meaningfully reduce commitment risk compared to manual, periodic purchasing. For organizations that had no commitment management tooling at all, they represent a genuine improvement. *** ## What Archera Includes — At No Additional Charge Archera's platform includes commitment laddering automation and convertible RI exchange as built-in capabilities. You can configure automation policies that run on weekly, monthly, or quarterly cadences, set savings thresholds that must be met before new commitments are purchased, and review every recommendation before it executes or allow fully autonomous operation. {% hint style="success" %} **Archera does not charge a percentage of savings for commitment laddering or exchange automation.** These are included in the platform because Archera's business model is different: Archera earns revenue through a variable risk-based fee on Guaranteed Commitments, not by taking a cut of the savings you achieve. {% endhint %} This fee model distinction matters more than it might initially appear. Tools that charge a percentage of savings have an incentive to maximize the commitments you hold — more commitments means more savings to share. Archera's incentive is for your commitments to be well-utilized, because Archera underwrites the downside risk. *** ## The Ceiling of Software-Only Approaches Commitment laddering and convertible exchange automation reduce commitment risk. They do not eliminate it. Software can make better decisions about when to purchase commitments and what configuration to target. It cannot guarantee that those commitments will be utilized. If your business changes unexpectedly — a major customer churns, a product line is discontinued, an acquisition changes your cloud footprint — software that optimized your commitment portfolio last month is not on the hook for what happens this month. This is the structural ceiling of automation-only approaches: they improve the probability of good outcomes, but the financial risk stays with you. Archera's insurance offering addresses this directly. See [Software-Only vs. Insurance-Backed Commitment Management](/help-center/commitment-automation/software-vs-insurance.md) for a full comparison. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.archera.ai/help-center/commitment-automation/commitment-automation-explained.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.