Adopting AWS 'Savings Plans' strategy
AWS introduced Savings Plans in November 2019 as a flexible pricing model that provides significant savings on AWS compute usage. This blog post provides a detailed insight into the model and an adoption strategy for these AWS plans.
What is AWS Savings Plan?
AWS Savings Plans is a new way to avail discounts in AWS by committing to a certain spend per hour for either 1 or 3 years. Spend above the committed level will be charged at the regular on-demand rates. AWS offers two plans. They are:
EC2 Instance Savings Plan
This offering provides up to 72% savings over the on-demand rates. Similar to standard Reserved Instances (RI), this plan provides size flexibility within the family, within the selected region and ability to switch OS and tenancy without additional work.
Compute Savings Plan
This plan provides more flexibility for up to 66% savings over the on-demand rates. This is similar to Convertible RIs that provide flexibility across the instance family, size and region, including Fargate usage.
How Savings Plans are different from RIs and how to choose between the two
Choosing between the two requires you to understand the pros and cons of each to make a decision that best suits your needs.
RIs are purchased for specific resources in a specific region. For instance, let us look at m5.xlarge in US-East with Linux OS. The discounted price is determined by the term of commitment, payment type and the RI type. While the discounts for Savings Plans are also determined by the term, payment schedule and type (EC2 or Compute plan), the resources covered by the Plans are much more flexible. For example, savings-plans-discounts cover all the m5 family instances in US East for EC2 Savings Plans, and all EC2 families and Fargate for Compute Savings Plans.
The standard RIs are comparable to the EC2 Plan as they both can get up to 72% savings. However, unlike standard RIs, the EC2 Savings Plans aren’t limited by OS or Tenancy. They are applicable as long as the EC2 resource is in the same family and region, regardless of OS, Tenancy and Size.
Similarly, Convertible RIs are comparable to Compute Savings Plan. Both plans offer up to 66% savings. Unlike the EC2 Plan, the Compute Plan is not limited by OS, Tenancy or Instance Size. Savings Plan covers all EC2 and Fargate instances regardless of family or region
Compute Savings
EC2 Instance Savings
Convertible RI’s
Standard RI’s
Savings over onDemand
Upto 66%
Upto 72%
Upto 66%
Upto 72%
Auto apply lower price to any instance family
Yes
No
No
No
Auto apply lower price to any instance size
Yes
Yes
No
No
Auto apply lower price to any OS or Tenancy
Yes
Yes
No
No
Auto apply lower price across regions
Yes
No
No
No
Auto apply lower price to Fargate Instances
Yes
No
No
No