AWS Savings Plans: The new AWS EC2 pricing model.

AWS Savings Plans

AWS Savings plans is a new way to save on EC2 compute on Amazon Web Services, this EC2 pricing model was launched on 04 Nov 2019, and we are going to see how this model could be more efficient than the other models.

first of all, if you don’t have an idea about the EC2 pricing models, we wrote an amazing article that can help you. It is essential that you have this idea in order to be able to compare with the AWS savings plans.

what is AWS Savings Plans?

Let’s make life easier! think of it this way; AWS Savings plans are like telling Amazon, hey! I’m going to commit to using your compute power for X dollars per hour for 1 or 3 years term, and as long as I am not exceeding the X dollars per hour usage I will be getting the savings plans discount, but if I do exceed the X I will be charged the on-demand rates for the extra usage.

what if you already use RI instances?

If you own Reserved Instances, the Savings plans apply to any On-Demand usage that is not covered by the RIs.

what are the types of AWS Savings Plans?

AWS Savings plans come in two different flavors:

1- Compute Savings plans:

These plans apply to all EC2 instances including those that are part of EMR, ECS, or EKS clusters, or launched by Fargate regardless of instance family, size, AZ, region, OS or tenancy. That means that we can change from C4 to C5 instances, shift from the Paris region to London and continue to pay the AWS Savings plans price.

Compute Savings plans provide the most flexibility and help to reduce your costs by up to 66% just like convertible RIs.

2- EC2 instance Savings plans:

these plans apply to a specific instance family within a region. Reduces the cost of your selected instances family (in that region) regardless of the size, AZ, OS or tenancy. That means that we can easily switch from C4.xlarge to C4.4xlarge or from Linux to windows without doing anything.

EC2 instance Savings plans provide the largest discount (up to 72%), just like Standard RIs.

Some advantages of AWS Savings Plans over AWS Reserved Instances.

  • less planning and management for 1 or 3 years term, with Savings plans you can easily change your planning and still continue to receive your discount.
  • Savings plan eliminates the complexity of RI, there is far less planning around which type of RI, which family and whether you’ll want to later convert the RI or sell it on the marketplace.
  • Savings Plans can be applied to Fargate as well as EC2 although it cannot be applied to RDS.

RI and Savings Plans similarities

  • one or 3 years commitment.
  • Has no-upfront, partial upfront, all upfront options.
  • Compute Savings Plans has the same discounts as Convertible RIs.
  • EC2 Savings Plans has the same discount as Standard RIs.
  • Recommendations and monitoring tools in Cost Explorer.
  • Savings apply first in the account that was purchased in.

Please let us know if this post helped you to understand this new AWS pricing model. Do you think it’s more efficient and flexible than the RI model? let us know in the comment section.

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