What is an AWS Savings Plan?
Key takeaway
This article explores AWS Savings Plans, a flexible pricing model that offers significant cost savings on Amazon EC2 usage. It delves into the benefits of AWS Savings Plans in providing cost predictability, flexibility, and discounts for committed usage across AWS services.
Introduction
An AWS Savings Plan is a flexible pricing model offered by Amazon Web Services (AWS) that allows customers to save money on their cloud usage. It provides a discounted rate for committed usage of specific AWS services, such as Amazon EC2 instances or Amazon RDS databases, in exchange for a one- or three-year commitment.
With an AWS Savings Plan, customers can choose between two types of plans: Compute Savings Plans and EC2 Instance Savings Plans.
Compute Savings Plans provide a discount on the compute usage across any AWS region, instance family, operating system, or tenancy. This means that customers can benefit from savings regardless of the specific instance type they use.
EC2 Instance Savings Plans, on the other hand, offer discounts specifically for EC2 instances. Customers can choose to commit to a specific instance family, region, and operating system, which allows for even greater savings.
The savings achieved through an AWS Savings Plan are applied automatically to the customer's bill. The discount is based on the customer's committed usage and is reflected in the hourly rate for the selected services. This makes it easy for customers to predict and control their cloud costs.
What are the Benefits of an AWS Savings Plan?
AWS Savings Plans offer a range of benefits that can help businesses optimize their costs and maximize their savings on AWS. One of the key advantages is the significant cost savings they provide compared to On-Demand pricing. By committing to a consistent usage pattern, businesses can save up to 72% on their AWS compute costs.
Flexibility is another advantage of AWS Savings Plans. Businesses have the flexibility to apply the savings across different EC2 instance types, sizes, and regions, allowing them to optimize their usage based on their specific needs. This flexibility enables businesses to tailor their AWS resources to meet their unique requirements while still enjoying the cost savings.
One of the great things about AWS Savings Plans is that the discounts are automatically applied to eligible usage. There's no need for businesses to take any additional steps or worry about manually applying the discounts. The process is seamless and ensures that businesses benefit from the savings without any hassle.
Managing AWS Savings Plans is also straightforward. They can be easily purchased and managed through the AWS Management Console or API. Businesses can track their savings and usage patterns, enabling them to monitor and optimize their cost-saving strategies effectively.
Savings Plans are compatible with both EC2 instances and Fargate containers, making them suitable for a wide range of workloads. This compatibility allows businesses to optimize costs for their various applications and services running on AWS.
By committing to either a 1-year or 3-year term, businesses can lock in discounted pricing for a longer duration. This long-term commitment provides stability and predictability in terms of costs, allowing businesses to plan and budget more effectively.
The Types of AWS Savings Plans
When it comes to optimizing costs on AWS, businesses have two popular options: AWS Savings Plans and Reserved Instances. Both offer significant cost savings compared to On-Demand pricing, but they differ in terms of flexibility and commitment.
AWS Savings Plans provide businesses with flexibility in terms of instance family, region, and operating system. This means that businesses can apply the savings across different EC2 instance types, sizes, and regions, allowing them to optimize their usage based on their specific needs. Savings Plans are a great choice for workloads with variable or unpredictable usage patterns, as they offer more flexibility in resource allocation.
On the other hand, Reserved Instances require businesses to commit to a specific instance type, size, and region for a fixed term of 1 or 3 years. While this commitment may seem restrictive, it offers businesses deeper discounts compared to Savings Plans. Reserved Instances are ideal for workloads with steady and predictable usage patterns, where businesses can accurately forecast their resource needs.
Another difference between Savings Plans and Reserved Instances is the way discounts are applied. With Savings Plans, the discounts are automatically applied to eligible usage, providing a seamless experience. On the other hand, Reserved Instances require businesses to manually assign instances to the reservation to benefit from the discounted pricing. This manual assignment process can be more complex and time-consuming, especially when managing a large number of instances.
In terms of management, both Savings Plans and Reserved Instances can be easily purchased and managed through the AWS Management Console or API. Businesses can track their savings and usage patterns, enabling them to monitor and optimize their cost-saving strategies effectively.
It's important to note that while Savings Plans offer more flexibility, Reserved Instances offer deeper discounts for long-term commitments. The choice between the two depends on the specific needs and usage patterns of the business. Some businesses may prefer the flexibility of Savings Plans, while others may find the higher discounts of Reserved Instances more appealing.
AWS Savings Plans vs Reserved Instances
When it comes to optimizing costs on AWS, businesses have two popular options: AWS Savings Plans and Reserved Instances. Both offer significant cost savings compared to On-Demand pricing, but they differ in terms of flexibility and commitment.
AWS Savings Plans provide businesses with flexibility in terms of instance family, region, and operating system. This means that businesses can apply the savings across different EC2 instance types, sizes, and regions, allowing them to optimize their usage based on their specific needs. Savings Plans are a great choice for workloads with variable or unpredictable usage patterns, as they offer more flexibility in resource allocation.
On the other hand, Reserved Instances require businesses to commit to a specific instance type, size, and region for a fixed term of 1 or 3 years. While this commitment may seem restrictive, it offers businesses deeper discounts compared to Savings Plans. Reserved Instances are ideal for workloads with steady and predictable usage patterns, where businesses can accurately forecast their resource needs.
Another difference between Savings Plans and Reserved Instances is the way discounts are applied. With Savings Plans, the discounts are automatically applied to eligible usage, providing a seamless experience. On the other hand, Reserved Instances require businesses to manually assign instances to the reservation to benefit from the discounted pricing. This manual assignment process can be more complex and time-consuming, especially when managing a large number of instances.
In terms of management, both Savings Plans and Reserved Instances can be easily purchased and managed through the AWS Management Console or API. Businesses can track their savings and usage patterns, enabling them to monitor and optimize their cost-saving strategies effectively.
It's important to note that while Savings Plans offer more flexibility, Reserved Instances offer deeper discounts for long-term commitments. The choice between the two depends on the specific needs and usage patterns of the business. Some businesses may prefer the flexibility of Savings Plans, while others may find the higher discounts of Reserved Instances more appealing.