AWS Savings Plans: What are they? How Do they Work?

by Maxim Melamedov | November 8, 2019
AWS Saving Plans

As you know, one of the most efficient ways to optimize and reduce costs on AWS is by purchasing commitments for 12 or 36 months of usage.

AWS recently announced the launch of two new saving plans:

EC2 Instance Savings Plans apply to a specific instance family within a region and provide the largest discount (up to 72%, just like Standard RIs). As with RIs, your savings plan covers usage of different sizes of the same instance type (such as a c5.4xlarge or c5.large) throughout a given region. You can even switch from Windows to Linux while continuing to benefit, without having to make any changes to your savings plan.

Compute Savings Plans provide the most flexibility and help to reduce your costs by up to 66% (just like Convertible RIs). The plans automatically apply to any EC2 instance regardless of region, instance family, operating system, or tenancy, including those that are part of EMR, ECS, or EKS clusters, or launched by Fargate. For example, you can shift from C4 to C5 instances, move a workload from California to London, or migrate from EC2 to Fargate, benefiting from Savings Plan prices along the way, without having to do anything.

Does it mean the end of the RIs?

The answer to this is ABSOLUTELY NO. Reserved instances will continue to exist alongside the new savings plans, guaranteeing you the needed capacity and flexibility of wide RI coverage with steep discounts.

While the new AWS offerings may simplify the RI procurement process, AWS will not reserve the needed capacity, but will create locking on specific family types and will disable any flexibility of 12 or 36 month-long commitments, so you may end up paying more than you’re consuming without any way out.

If you are looking for true flexibility with the steepest discounts, the Standard RI is still the undisputed king.

This is the only option out there that allows you to benefit from 12 or 36-month RI discounts with short-term flexibility.

With the Standard RI, you can buy RIs for a period as short as one month, and if you’re lucky that RI may carry a three-year ~65% discount. To benefit from such a discount, all you need to do is go to the RI marketplace and purchase it.

Alternatively, you can use the standard RI for as long as you need it, and once you’ve changed your workload and that RI is no longer in use, you can put it on sale via the RI marketplace. This will allow you to benefit from the discount and avoid lock-in.

While it’s true that the new savings plans would give you more options and opportunities to use the discounts AWS provides, it would never be a one-and-done scenario, as your workloads are constantly changing.

To permanently cross the management of AWS RI savings off your to-do list, you need an automated solution that constantly monitors and adapts the savings plans and RIs in conjunction with your changing workloads.

Cloudvisor’s solution identifies and leverages the best of all possible offerings and maximizes the received discounts while maintaining the widest RI coverage out there.