A client called me last week with a problem I have been hearing about more often lately. They had made significant reserved instance commitments with a major cloud provider, overbuying for what they thought would be heavy AI training workloads. Now they were sitting on thousands of dollars in idle capacity every month. Their plan was simple: resell it to someone else. Except they couldn’t.

I have been doing cloud consulting for a long time, and this situation once had a straightforward solution. You went to the marketplace, listed your unused reservations, and found a buyer. The process was a bit clunky, but it worked. These days, the answer is far more complicated, and my client learned this the hard way.

AI has made this problem increasingly common. Companies initially committed to compute capacity based on ambitious training plans. Prototype projects were expected to scale, and inference workloads were projected to grow substantially. Then reality hit. Some projects did not materialize. Some models trained faster than expected. Some inference patterns were lighter than anticipated.

Many organizations now hold reserved capacity they can’t use, discard, or share without a complex, increasingly restricted process. This reality is something every company with significant cloud spend needs to clearly understand.

The history of cloud resale

There was once a functioning resale market for cloud reserved instances. AWS, for example, maintained a Reserved Instances Marketplace where companies that had purchased reserved capacity could sell those reservations to other AWS customers. This was a legitimate, AWS-sanctioned process. Companies would register as sellers, list their unused reservations with pricing and terms, and if a buyer appeared, the marketplace would facilitate the transaction.

The resale market was useful for companies that had overestimated their needs or whose business changes reduced their cloud consumption. Instead of simply absorbing the cost of unused commitments, they could recoup some of that investment by selling to other organizations with unmet demand. It created a secondary market that added liquidity to what was otherwise a rigid financial arrangement.

My client had some experience with this resale market a few years ago and assumed they could use it again. They were unpleasantly surprised to learn that the rules had changed.

AWS changes the rules

In January 2024, AWS implemented a significant policy change that effectively shut down the resale of EC2 Reserved Instances on its platform. AWS stopped allowing companies to resell their unused reserved capacity through the Reserved Instance Marketplace or any other official channel. If you have a reserved instance commitment with AWS, you are essentially stuck with it unless you can use it yourself or modify your reservation.

This change had a real impact on companies that had relied on resale as part of their cloud financial management strategy. It reduced flexibility and increased the risk of long-term reserved commitments. When I explained this AWS policy change to my client’s representatives, I could hear the frustration in their voices. They had made their commitment in good faith, carefully modeled their expected AI workloads, and now faced the reality that there was no easy exit.

The reasoning behind this change is not entirely clear, but AWS likely viewed capacity resales as something that complicated their billing and commitment models without providing enough benefit to the overall ecosystem. Regardless of the company’s reasons, the primary resale path for the largest cloud provider has been effectively closed.

What options still exist?

What can companies do now when they find themselves with reserved capacity they no longer need? The first possibility is to work directly with the cloud provider to modify or exchange the reservation if it is convertible. Some reservation types allow modifications, such as changing the instance type, region, or tenancy. This will not eliminate the commitment, but it may help companies better align their reservations with actual workload needs.

The second option is to use third-party brokers and marketplaces that operate independently of the cloud providers. Although AWS has shut down its official resale channel, brokers and marketplaces still facilitate resale arrangements for other cloud providers and for some AWS scenarios. These arrangements can be more complex and carry more risk, but they remain a possibility for companies determined to move unused capacity.

The third alternative is to optimize usage. Companies can invest in better utilization monitoring, workload placement, and automation to ensure that reserved capacity is used as efficiently as possible. This does not recover the money already spent, but it reduces future waste.

My client explored all three alternatives and found that each had significant limitations. Modifications were possible, but only within a narrow range. Third-party brokers were interested, but the process was opaque and uncertain. Optimization helped, but it could not eliminate the fundamental overcommitment they had already made.

The broader implications

Cloud commitments are more rigid than many enterprises initially realize because they lack a liquid market and because providers control modifications, transfers, or cancellations. Right now, I see this pattern most often in the AI space. Companies commit to massive amounts of compute for training and inference based on projections that rarely reflect the actual workloads. Then they are surprised to find themselves locked into payments. The AI boom has led to significant overcommitment because enterprises remain unaware that the resale mechanisms that once existed have been largely shut down.

This is why cloud financial management has become such an important discipline. Companies need to be far more thoughtful about how they commit to cloud resources, how they model their future consumption, and how they build flexibility into their cloud strategies. The days of assuming you can always resell your way out of an overcommitment are effectively over, at least with AWS.

For Azure and Google Cloud, the resale landscape is slightly different, but the same general principles apply. These providers have their own capacity transfer policies and, like AWS, those policies can change at any time. Companies should understand their options before making large, committed purchases and build contingency plans in case their actual usage diverges from their projections—or if resale policies change.

The bottom line is that reselling unused reserved cloud instances is far more complicated than it sounds. The market is not as open as it once was, the options are limited, and the providers themselves hold most of the cards. My client got burned, and I doubt they will be the only one. Companies that want to optimize their cloud spending should focus on accurate forecasting, thoughtful commitment sizing, and ongoing optimization rather than relying on resale as a safety valve. That approach worked at one point, but those days are largely gone.

AI coding agents are making it easier than ever to produce software. Ensuring that software is secure before deployment is another matter — one that AWS thinks AI should help with too.

As enterprises adopt agentic development workflows, the volume of first-party code being created and modified is rising rapidly. Yet the process of validating vulnerabilities, determining whether they are exploitable, and fixing them often still depends on developers and security teams working through findings manually.

AWS is aiming to address that imbalance with Continuum, a new service designed to continuously discover, investigate, and remediate vulnerabilities in enterprise environments, whether the code is their own or from third parties.

Rather than simply generating alerts, the service is intended to help enterprises move findings through the entire remediation lifecycle, AWS VP of Security and Observability Chet Kapoor wrote in a blog post.

For first-party applications, Continuum can analyze code, validate whether vulnerabilities are exploitable, generate remediation recommendations, and propose fixes that can be reviewed through existing software development workflows, helping developers address security issues without requiring security teams to manually investigate every finding, Kapoor said.

Once users think Continuum has learned enough about their environment and understands their guardrails, they can put it in what AWS calls “enforce mode” to autonomously fix any code lapses, Kapoor said.

Continuum borrows some of its capabilities, penetration testing and code scanning features, from an existing service, Security Agent.

Other capabilities are all-new, including threat modeling, which is designed to automatically generate threat models from source code or design documents and output them in STRIDE format.

Keeping pace with AI-driven software development

Analysts see Continuum helping enterprise developer teams ship more secure code while keeping pace with AI coding tools.

“The harder problem is no longer just finding issues, it is knowing which ones are real, which ones matter in their environment, and which ones need to be fixed first,” said Akshat Tyagi, associate practice leader at HFS Research. “Traditional workflows built around dashboards and manual triage struggle with that volume. A dashboard can show the backlog, but it does not validate the finding, assess business impact, or help remediate it.”

Continuum’s value, according to Tyagi, “is not just more detection, but using AI to prioritize risk findings, suggest mitigations, and support faster action while keeping humans in control of high-risk decisions.”

Taking faster action is becoming increasingly important as attackers are gaining access to many of the same AI capabilities that enterprises are using to accelerate software development and security testing, according to Amit Chandak, chief analytics officer at IT consulting firm Kanerika. “The gap between a flaw being disclosed and a working exploit is shrinking rapidly from months to hours,” he said.

While Continuum may reduce repetitive work for developers and SREs, it could also create new responsibilities for CISOs around governance, oversight, testing, and maintaining guardrails for automated actions.

“Continuum changes the CISO’s role from managing findings to governing how findings are handled. The focus moves to setting rules: what can be automated, what needs human approval, and what level of risk is acceptable in production,” Tyagi said. “Staffing will shift too. There may be less manual triage, but more need for people who can review AI-generated fixes, set guardrails, and know when not to trust the system.”

Even so, Chandak does not expect the offering to lead to immediate headcount reductions, particularly given that Continuum is only available as a gated preview.

Continuum could change how CISOs measure work, Tyagi said: “Ticket count matters less. Better measures are how quickly real risks are validated and fixed, how many false positives are removed, and whether automation is reducing risk without causing new problems.”

Those same metrics could also become a yardstick for CISOs determining how much autonomy to give tools like Continuum, said Chandak. Most enterprises’ data and governance practices are not yet ready for fully autonomous remediation, said Chandak, adding that, “AWS’ graduated trust design, under which enterprises have the option of choosing the degree of autonomy, from human in the loop to fully automatic remediation, is an admission of that fact.”

Beyond first-party code

Continuum could also help CISOs with third-party code vulnerability analysis, where enterprises often have less visibility and control.

“Most third party vulnerability alerts are noise. A tool may flag a vulnerable library, but the real question is whether that vulnerable code is actually used in production. If Continuum can answer that, it helps teams focus on the few issues that matter,” Tyagi said. “This is especially useful for open-source and software supply chain risk, where enterprises depend on packages and hidden transitive dependencies they may not fully track. It also helps when no patch is available yet.”

However, he warned, Continuum might not offer a direct fix to third-party code: “You usually cannot patch third-party code yourself as you don’t own it, so remediation there means version pinning or compensating controls.”

It is tempting to date cloud computing from the launch of Amazon S3 in 2006 and the rise of infrastructure as a service (IaaS) that followed. That was certainly the moment the market changed in a visible, irreversible way. But the truth is that cloud began earlier, in the 1990s, when software as a service (SaaS), application hosting, managed services providers, and various forms of remote subscription computing started to reshape how enterprises thought about owning and operating technology. Even then, the core value proposition was familiar: Let someone else run the infrastructure, abstract the complexity, deliver capability as a service, and allow the business to consume only what it needs.

What AWS changed was the scale, accessibility, and precision of the execution. Amazon turned infrastructure into a programmable utility. It made compute and storage available in ways that were elastic, self-service, API-driven, and globally reachable. That was the breakthrough. Enterprises had outsourced pieces of technology before, but now they could rent raw infrastructure with unprecedented speed and flexibility. The launch of Amazon S3 was especially important because it provided a durable, scalable storage foundation that became one of the building blocks for modern digital business.

AWS changed everything

Technology markets are rarely transformed by the first company to think of an idea. They are transformed by the first company to make that idea operationally real, economically viable, and broadly consumable. AWS did exactly that. It built a model for infrastructure as a service that allowed enterprises, startups, and eventually governments to rethink the entire life cycle of IT delivery.

Looking back from 2026, it is difficult to remember how radical this concept once seemed. At the time, many enterprise leaders considered public cloud too risky, too immature, too uncontrolled, or simply too foreign for conventional IT governance. There were concerns about security, compliance, vendor dependency, performance, data residency, and reliability. Many of those concerns were valid. Early cloud adoption often ran ahead of cloud maturity, and many organizations discovered that moving quickly did not always mean moving wisely.

Still, the economics of agility overwhelmed the inertia of the old model. Provisioning that once took months could be done in minutes. Capital expenditure gave way, at least in part, to operating expenditure. Experimental workloads became easier to justify. Digital businesses could scale without building data centers first. AWS led that transition, and the rest of the industry followed, including competitors that helped mature the market.

Cloud’s strengths and liabilities

If the first decade of cloud was about acceleration, the second decade was about correction. Enterprises learned that cloud was not automatically cheaper, not automatically simpler, and not automatically better. It was better when used with discipline. It was more cost-effective when architected intelligently. It was more resilient when governance, operations, and security were designed into the system rather than added later.

This is when the industry grew up. We learned about cloud financial management because too many organizations assumed elasticity would control cost, only to discover that unused resources, poor workload placement, and fragmented accountability could drive spending far beyond expectations. We learned that public cloud could provide extraordinary innovation and reach, but also that not every workload belongs there. Latency, sovereignty, compliance constraints, legacy integration challenges, and predictable high-volume workloads all forced a more nuanced view.

We also learned about concentration risk. As enterprises standardized on a small number of hyperscalers, questions emerged around resilience, lock-in, and strategic dependency. The answer was never simplistic multicloud posturing for its own sake. It was architectural realism. Use the public cloud where it creates a clear advantage. Keep options open where business risk requires it. Understand portability, but do not romanticize it. In other words, cloud became less ideological and more practical.

Cloud is now an assumption

Perhaps the most important shift of all is that we no longer debate whether cloud is real or whether enterprises should use it. That argument is over. Cloud is baked into the cake. It is part of enterprise operating reality. The modern enterprise assumes on-demand infrastructure, platform services, automation pipelines, managed databases, identity fabrics, observability stacks, and globally distributed application delivery. Even when workloads remain on-premises or at the edge, they are often built, governed, or operated with cloud-native thinking.

This is maturity. Cloud is not a project or a trend. It is not even a strategy by itself. It is an enabling model that now underpins enterprise strategy. Businesses no longer ask whether to adopt cloud in the abstract. They ask how much cloud, which cloud services, under what governance model, at what cost profile, and in support of which business outcomes.

That may sound less exciting than the early days of disruption, but it is actually the mark of success. The most powerful technologies eventually disappear into standard practice. Electricity, networking, virtualization, and mobile platforms all went through this process. Cloud has done the same.

How cloud supports the AI race

As enterprises move aggressively into AI, cloud has entered another pivotal phase. AI is not replacing cloud. It is intensifying the importance of cloud while also changing how value is measured. Training, tuning, deploying, and governing AI systems require immense computational scale, specialized infrastructure, distributed data access, and operational consistency. Public cloud providers are well positioned to offer those capabilities, particularly with GPUs, AI platforms, managed model services, and data integration tools.

But this is not a repeat of the early cloud era. Enterprises are more sober now. They know the importance of cost, latency, and data gravity. They know that governance and accountability matter more in AI than perhaps anywhere else in modern IT. The role of cloud in the AI race is therefore foundational, but not absolute. Some AI workloads will run in public cloud. Some will be distributed across edge computing environments. Some will remain in private environments for reasons of sovereignty, economics, or control. The key is not to force a universal answer. The key is to create an architecture that aligns AI ambitions with operational reality.

Cloud should play the role it has gradually earned: not as a religion, but as a strategic utility. For AI, the cloud is where many enterprises will source scale, experimentation speed, global reach, and managed innovation. The winning organizations understand where cloud creates leverage and where other operating models make more sense.

Changing how enterprises think

The real story of the past 20 years is not just that AWS launched S3 and helped popularize infrastructure as a service. It is that cloud changed enterprise behavior. It normalized service consumption over asset ownership. It moved architecture toward abstraction, automation, and modularity. It forced IT organizations to broker capability rather than build everything from scratch. It redefined speed as a core competitive requirement.

And now, as AI becomes the next forcing function, cloud stands less as a novelty and more as the platform on which the next era will be built. That is a remarkable outcome for something that, in many ways, started with the old idea that computing could be delivered remotely on a subscription basis. We have been heading here for longer than many people realize. In the past two decades, led in large measure by AWS and the broader hyperscale movement it accelerated, cloud has evolved from a gamble to an indispensable foundation.

Hard to believe? Yes. But also inevitable in retrospect.

For many developers, the hard part of building an AI application isn’t the model anymore. It’s keeping the application’s knowledge current.

Retrieval-augmented generation (RAG) has become a popular technique for grounding AI applications in enterprise data, but it also introduces a steady stream of operational work, including tasks such as updating embeddings and indexes, synchronizing data sources, and tuning retrieval performance.

AWS is seeking to remove much of that burden with Bedrock Managed Knowledge Base, a new managed service that automates the retrieval layer behind enterprise AI applications.

“By default, the service automatically selects and manages a default embeddings model, re-ranker model, and foundational model on your behalf, so you can get up to speed quickly without needing to pick or maintain one yourself,” Daniel Abib, senior solutions architect at AWS, wrote in a blog post.

In order to help maintain data pipelines without building and managing custom integrations, the service also comes with six native connectors for enterprise data sources, including Amazon S3, SharePoint, Confluence, Google Drive, OneDrive, and web content, Abib wrote.

Managed RAG could boost developer productivity

For developer teams, the ability to automatically manage infrastructure could provide an immediate boost in productivity, according to Pareekh Jain, principal analyst at Pareekh Consulting.

“Enterprises spend significant time building data connectors, managing document ingestion and indexing, tuning retrieval quality, enforcing access controls, and maintaining vector databases, often making the RAG infrastructure more complex than the AI application itself. With this, developers can now focus on building the application,” Jain said.

“That should accelerate deployment timelines and reduce maintenance costs while enabling teams to focus on business outcomes,” Jain added.

Beyond reducing infrastructure management overhead, Managed Knowledge Base also targets retrieval accuracy. The service, according to Abib, also comes with features, such as Smart Parsing and Agentic Retriever, which are aimed at helping improve accuracy across different content types and sources, which is often an issue with RAG pipelines and queries spanning multiple repositories.

Improved retrieval quality could prove particularly important for organizations looking to move AI projects from experimentation to production, according to Jain.

“This is a common challenge across enterprises because business data is scattered across multiple systems. As organizations move from AI pilots to production, retrieval quality becomes critical for user trust, making RAG infrastructure a major bottleneck that often delays deployments,” Jain said.

AWS is also positioning Managed Knowledge Base as a building block for agentic applications, which, Jain said, can place even greater demands on enterprise knowledge and retrieval systems.

The service, according to the hyperscaler, integrates with Bedrock AgentCore, reducing the amount of code and configuration required to connect enterprise knowledge sources to AI agents while providing built-in monitoring, evaluation, and access management capabilities.

Taking aim at RAG stacks?

That integrated approach could also have implications for the broader RAG tooling ecosystem, Jain said.

“Managed services such as Bedrock Managed Knowledge Base could reduce demand for standalone RAG orchestration and retrieval frameworks, including tools such as LangChain and LlamaIndex, as well as some custom combinations of vector databases, ingestion pipelines, and retrieval services,” Jain noted.

However, Jain cautioned that the convenience of an integrated approach comes with tradeoffs, potentially increasing customer dependence on a single cloud provider and limiting flexibility in how AI infrastructure is assembled and managed.

Amazon Bedrock Managed Knowledge Base is currently available across North Virginia, Oregon, Sydney, Tokyo, Dublin, Frankfurt, London, and AWS GovCloud (US-West) Regions.

The service follows a usage-based pricing model, with charges tied to the volume of indexed data stored and retrieval requests processed.

Licensing can be complicated, particularly when enterprises are forced to double-pay because the software they already own is only licensed for a specific environment, and moving it requires a whole different licensing model. Without proper portability rights, they need to make additional financial investments to run the same workloads in a different home.

AWS says its new Bring Your Own Media (BYOM) service eliminates this duplication. Customers can now reuse their existing Microsoft SQL Server media and licenses on Amazon Relational Database Service (RDS) with no additional licensing fees.

This means enterprises no longer have to justify workload migrations to the cloud against existing licensing commitments and infrastructure investments, AWS said.

“What used to be a licensing barrier between operational SQL Server data and agentic AI is now gone,” AWS data engineer Srikanth Katakam and product marketing manager Colleen Betik wrote in a blog post announcing the service.

Avoiding the double-licensing problem

To drive true value, agentic AI apps must have access to elastic GPU capacity as well as direct, low-latency access to the data they need to reason and make decisions. But, AWS argued, that can be difficult in self-managed data centers and on premises infrastructure with limited access to agentic AI cloud-native services. But a lot of enterprise data lives in Microsoft SQL Server, and until now customers have had to pay for a second license to use a fully managed cloud service like RDS.

Now, with BYOM on Amazon RDS for SQL Server, enterprises can reuse their existing SQL Server Enterprise Edition or Standard Edition licenses through a “lift-and-shift” model. This brings their data into a fully-managed environment.

According to the licensing distribution terms, enterprises must provide their licensed SQL Server Release to Manufacturing (RTM) media to Amazon RDS. They can then upload that media to Amazon S3 and launch BYOM instances. Enterprises must configure AWS License Manager to perform automatic instance tracking.

From there, RDS automates patching, backups, high availability, and monitoring, while providing direct access to agentic AI and analytics services native to AWS. The platform also reports vCPU usage to provide visibility into SQL Server license usage, Katakam and Betik wrote.

“You do not need to choose between protecting your SQL Server licensing investments and giving your data a path to the AWS analytics and agentic AI services redefining what’s possible in the cloud,” they said. 

It’s important to note that this service is only available to enterprises with Microsoft Software Assurance (SA), an add-on which supports mobility and rehosting of existing licenses. Enterprises must verify that their SQL Server licenses comply with Microsoft’s licensing agreement, and that they have a SQL Server License (Standard or Enterprise) with SA. They also must submit a License Mobility Verification Form to Microsoft; it, in turn, will notify AWS once verification is complete.

AWS emphasized that enterprises remain responsible for compliance; it does not block operations if license limits are exceeded.

More control over workloads, loosening Microsoft’s grip

The advantage of this service, explained Mike Leone, principal analyst at Moor Insights & Strategy, is that enterprises can get a Microsoft SQL Server workload onto a managed AWS service without rewriting it for Aurora or paying for the license twice. This means they can modernize on their own schedule rather than being forced into rewrites before they’re ready.

“For a lot of shops, that control over timing is worth more than the license saving itself,” Leone said.

This also loosens Microsoft’s grip on enterprise workloads, because organizations finally have somewhere else to run SQL Server using licenses they already own, he noted. Realistically, their dependency shifts to AWS rather than disappearing entirely, as their data ends up living next to AWS’s AI services.

“For a lot of teams, that’s a trade they’re glad to make for the managed infrastructure and the AI tooling they get in return,” Leone said.

Yaz Palanichamy, a senior advisory analyst at Info-Tech Research Group, also pointed to significant improvements stemming from the migration. Notably, it allows organizations to transition away from static, linear, or reactive storage capabilities towards more dynamically intelligent environments.

“The key is to balance the unification of transactional data towards managed AI and machine learning pipelines,” he said.

Enterprises take on new responsibilities

The catch? Leone noted that enterprises now own the task of licensing compliance. Staying current on SA, the Microsoft maintenance contract that makes any of this legal, and the license mobility rules, “become your headache instead of something baked into the bill,” he said.

Furthermore, he added, lift-and-shift has a way of turning into “lift-and-forget” when enterprises move SQL Server as-is and never actually modernize, “so you end up carrying all the old baggage onto a shinier platform.”

Palanichamy also pointed to skyrocketing AWS costs, since operationalizing AI agents requires a considerable amount of data ingestion and querying. This can potentially be cost prohibitive on RDS for SQL Server.

“One aspect to consider would be the relative time to production value, so that enterprises can better handle the management of volatile AI workloads,” he said.

Just one challenge in the AI race

Although AWS frames licensing complexity as a roadblock to agentic AI, analysts say it’s really just one piece of the puzzle.

Organizations are not in an AI-ready state due to a number of factors, Palanichamy noted. This could be total cost of ownership (TCO)-related, a lack of appropriate acceptable use policies (AUPs), or concerns around security and compliance.

If and when enterprises are ready to adopt AI, they must perform thorough needs analysis/process optimization benchmarking exercises to determine what workflows could benefit from the technology, he said, and, conversely, flag workflows where AI could prove “an impediment or potential disservice.”

Leone also pointed out that moving SQL Server onto RDS doesn’t “magically make your data agent-ready,” nor does it make it smarter. The data proximity and managed plumbing are what actually support agents. Sitting data next to Bedrock and the rest of AWS’s AI services means builders “stop wasting time shipping the data around or building one-off integrations every time an agent needs it.”

Ultimately, though, licensing isn’t the real issue when it comes to AI; it’s more of a migration problem. The real roadblocks are messy data, questionable governance, and teams that aren’t ready to run it in production, and, Leone said, “no change to a license bill touches a single one of them.”