Article Save AWS Compute Cost with the new AWS Savings Plans
By Ozioma Uzoegwu / 20 Dec 2019
By Ozioma Uzoegwu / 20 Dec 2019
Over the years, AWS have released innovative solutions that customers can implement to reduce cloud spend. When the elastic cloud compute service (EC2) first launched, the pricing was on-demand which was suitable for short term and unpredictable workloads. However, the longer the EC2 service is used, the more defined the compute requirements to support the workload become. To further save customers the compute cost of running established workloads in "steady state", AWS introduced the concept of Reserved Instances.
Reserved Instances (RI) are billing constructs that can be used to save up to 72% of the on-demand price within a 1 or 3 year term. The two main types:
Note: The RI features that can be modified are dependent on the scope (i.e. Regional or Availability Zone) of the RI.
As the scale of the compute resources used in the AWS environment increases, it can introduce a considerable overhead in identifying the optimal reserved instances to setup, as well as managing existing RIs which limits customers from fully benefiting from RI discounts.
To eliminate the heavy lifting required to manage RI and provide flexibility for customers, AWS have recently released AWS Savings Plans. A new flexible pricing model which helps customers save up to 72% of EC2 and Fargate (serverless compute for containers). Simply commit to a consistent usage amount, e.g. $5/hour, over 1 or 3 years period, and in exchange AWS will offer a discount for all usage up to $5 in a given hour. Any usage beyond the commitment will be charged at the regular on-demand prices.
Savings plans will help customers to better manage commitments at scale across AWS compute services (with 200+ instance options across 22+ regions). It will also support changes to the compute usage without requiring any modification or exchange of RIs.
There are two main types of Savings Plans:
For now, Reserved Instances will still be available for both existing and new customers. However, with the flexibility and reduced management overhead offered by Savings Plans, the expectation is that customers will gradually move to savings plans for net new or renewal of existing commitments. Furthermore, both RIs and Savings Plans can be used together to attain better savings coverage.
Savings Plans can be set up and managed within the Cost Explorer and EC2 page of the AWS console. AWS also provides a recommendations engine that uses historical compute usage data across 7, 30 or 60 days to generate purchase options across a 1 or 3 year savings plans term with payment options of: no upfront, partial upfront or all upfront.
Third party cost optimisation tools such as CloudCheckr and CloudHealth have both announced their support for AWS Savings Plans with future roadmaps to simplify the selection of the right discount plan i.e. Savings Plans, Standard RIs, Convertible RIs, and improve visibility into discount coverage for better cost optimisation.
To subscribe to savings plans, customers will need to consider a number of factors to maximise savings while protecting any existing investments on RIs.
Furthermore, when purchasing savings plans and the corresponding management while in term, other factors to consider include:
Insight as an AWS Well-Architected Partner is well positioned to provide expert advice to customers that would want to leverage savings plans. Our AWS experts are available to work with customers to review their current AWS environment and make recommendations on how to adopt savings plans, ensuring that the factors highlighted above are taken into consideration in the short and long term.
If you are interested in finding out more, please contact your Insight Account Manager or get in touch via our contact form here.
You might also like our article on ‘Insight AWS Well-Architected Review Proposition’.
