AWS Announces New Savings Plans
Amazon Web Services (AWS) has today announced new savings plans for AWS compute services. Savings plans are an alternative to Reserved Instances (RIs) or Convertible Reserved Instances where customers can commit to an hourly compute value over a 1 or 3-year term.
With a Reserved Instance you are committing to a specific instance type for a period, for example you could reserve a T2 Micro instance for a 12-month period. If you no longer require the instance that the Reserved Instance credit is allocated to, you can allocate the credit to another T2 Micro instance only, running the same operating system.
With Convertible RIs, you could change the RI credit to another similar instance type or a different operating system, but you may have needed to pay a true up cost if the instance type you convert to is of a higher value.
With Reserved instances you can save up to 72% on hourly instance pricing, but there is a significant management overhead to organise RI purchases and exchanges.
With Savings Plans, you simply commit to a minimum hourly spend on compute usage over a 12 or 36-month term. Every AWS compute service has an hourly rate and a savings plan rate.
Savings plans can reduce AWS compute costs by up to 66%. The savings plan applies to all compute resources regardless of the region they are hosted in, the instance type etc — so you no longer need to get involved in complex RI management. Once you use the committed compute resources in the Savings Plan, further usage is billed at the hourly on-demand rates.
AWS will continue to sell RIs but it would appear that savings plans offer a much more flexible and easier to manage alternative to optimising AWS compute costs.
AWS are offering 2 types of savings plan — Compute Savings Plans and EC2 Instance Savings Plans.
With the Compute Savings Plan, you can reduce compute costs by up to 66%. The plan automatically applies to all instance types regardless of instance family, region or OS. It also covers instances launched by other services including Elastic Map Reduce, Elastic Container Service and Elastic Kubernetes Service.
The EC2 Savings Plan offers the greatest savings potential of up to 72%. This plan applies to a specific EC2 instance type within a specific region. The Savings Plan allows you to switch to different instance sizes of the same instance type, eg T2 Micro to T2 Nano, and it like the Convertible RI you can switch operating system.
AWS have made it easy to purchase a Savings Plan via the AWS Cost Explorer:
As with Reserved instances you still have the option of choosing All Up Front, Partial Up Front or No Up Front payment options, and you can choose whether to have the Savings Plan recommendation based on usage for the past 7, 30 or 60 days usage. I don’t have enough usage in my account for any Savings Plan recommendations, but they would appear on this screen, comparing the monthly on-demand spend to estimated spend with a Savings Plan, and showing an estimated monthly saving:
If I wanted to go ahead with the savings plan, I can purchase by clicking on ‘Purchase Savings Plans’ where I can choose whether I want to purchase a Compute or EC2 savings plan, the term commitment and the hourly commitment amount:
So you can see it’s very straightforward to get Savings Plan recommendations and make savings plan purchases. The functionality is live now in all regions apart from China, so you can log in and see how to make savings right now! Alternatively you may seek the assistance of your AWS Managed Services provider to guide you through the process.
