AWS Savings Plan 101: All You Need to Know

What is AWS Savings Plan?

AWS Savings Plan is a cost optimization solution that allows users to save money on their AWS usage costs by committing to a consistent amount of usage (e.g. a certain number of instance hours) over a one or three-year term. It’s a flexible pricing model that helps companies lower their overall costs by providing a discount on their AWS usage costs in exchange for a commitment to use a specified amount of compute capacity.

How does it work?

AWS Savings Plan works by allowing users to make a commitment to a consistent amount of usage for a specified term, in exchange for a lower rate on AWS services usage. Users can choose from three different types of AWS Savings Plans: Compute Savings Plan, EC2 Instance Savings Plan and Sage Maker Savings Plan

AWS Savings Plan, Compute, EC2 Instance, SageMaker, Amazon Web Services, Cost Optimization

Benefits of using AWS Savings Plan

  1. Cost Savings: Savings up to 72% compared to On-Demand prices.
  2. Flexibility: Switch between eligible instance types and sizes, as well as regions, without having to renegotiate their commitment.
  3. Predictability: Enjoy consistent, predictable costs by committing to a specific amount of usage.
  4. Easy to Use: Manage your AWS Savings Plan through the AWS Management Console or the AWS Command Line Interface (CLI).

Types of AWS Savings Plans

There are three different types of savings plans offered by AWS, each with a different functionality and a different purpose.

Amazon EC2 Savings Plan

The EC2 Savings Plan is designed for workloads that use Amazon Elastic Compute Cloud (EC2) instances. This type of savings plan offers a discount on EC2 usage in exchange for a commitment to use a consistent amount of EC2 usage for a 1 or 3-year term. EC2 Instance Savings Plan is ideal for users who want to save specifically on EC2 instance usage, regardless of the region or operating system used.

Use cases for EC2 Savings Plan include:

  • Web applications that require a consistent number of EC2 instances to run 24/7.
  • Batch processing jobs that run on EC2 instances on a regular schedule.

Compute Savings Plan

The Compute Savings Plan is a flexible type of savings plan that can be applied to any eligible compute services, including EC2 instances and AWS Fargate. This type of savings plan is ideal for users with multiple compute services and want to optimize their overall compute costs. Compute Savings Plan is ideal for organizations who want to lower their overall costs by committing to a specific amount of compute capacity across multiple services, including EC2 instances, Fargate, and Lambda.

Use cases for Compute Savings Plan include:

  • Companies who use both EC2 instances and AWS Fargate for their compute needs.
  • Organizations who have a mix of on-demand and reserved instances and want to optimize their overall compute costs.

SageMaker Savings Plan

The SageMaker Savings Plan is designed for business that use Amazon SageMaker, a fully managed platform for building, training, and deploying machine learning models. This type of savings plan offers a discount on Amazon SageMaker usage in exchange for a commitment to use a consistent amount of usage for a 1 or 3-year term.

Use cases for SageMaker Savings Plan include:

  • Workloads that use Amazon SageMaker for building, training, and deploying machine learning models on a regular basis.
  • Companies that have a consistent amount of Amazon SageMaker usage and want to optimize their overall machine learning costs.

Differences Between AWS Savings Plans Pricing

Here are the differences and features between the three types of AWS plans:

Savings Plan Differences Features Pricing
Compute Savings Plan Provides lower rates for usage of EC2 and Fargate services Can be applied to any EC2 or Fargate usage in an AWS region Pay a lower rate for every hour that an EC2 or Fargate service is used
EC2 Instance Savings Plan Provides lower rates for usage of EC2 instances Can be applied to any EC2 instance usage in an AWS region Pay a lower rate for every hour that an EC2 instance is used
SageMaker Savings Plan Provides a discount on Amazon SageMaker usage Can be applied to any Amazon SageMaker usage in an AWS region Pay a lower rate for every hour that Amazon SageMaker is used
  • Coverage: Compute Savings Plan covers a wider range of compute services, while EC2 Instance Savings Plan is more focused on EC2 instances.
  • Savings Amount: The specific savings amount will depend on the rate and usage committed to, but both plans offer cost savings compared to On-Demand pricing.
  • Flexibility: Compute Savings Plan provides more flexibility in terms of the services it covers and the instances that are eligible.

AWS Savings Plan Prerequisites and How to Apply

Prerequisites

  • In order to use AWS Savings Plan, you must have an AWS account and be subscribed to one or more eligible AWS services.
  • The eligible services include Amazon EC2 instances, Fargate, Lambda and Sagemaker.
  • It is important to note that AWS Savings Plan only applies to these specific services and cannot be used with other AWS services.

How to Apply for AWS Savings Plan

To apply for an AWS Savings Plan, follow these simple steps:

  1. Sign in to the AWS Management Console.
  2. Navigate to the AWS Cost Explorer service.
  3. Select the “Savings Plans” option.
  4. Choose the type of plan you want to purchase.
  5. Select the usage type, region, and instance family.
  6. Set the commitment amount and duration.
  7. Review and purchase the plan.

How to View Savings Plan

To view your AWS Savings Plan usage and details, follow these steps:

  1. Sign in to the AWS Management Console.
  2. Navigate to the AWS Cost Explorer service.
  3. Select the “Savings Plans” option.
  4. Choose the plan you want to view.
  5. View the usage and details of the plan.

Conclusion

AWS Savings Plans are an excellent way for AWS users to save on costs, especially if you have a lot of AWS usage. With the ability to select different plan types and coverage, you can find the perfect savings plan for your needs.

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