AWS Savings Plans are a flexible pricing model that offers significant cost savings on AWS compute usage compared to On-Demand pricing. They provide up to 72% savings in exchange for committing to a consistent amount of compute usage (measured in dollars per hour) for a one or three-year term.
The…AWS Savings Plans are a flexible pricing model that offers significant cost savings on AWS compute usage compared to On-Demand pricing. They provide up to 72% savings in exchange for committing to a consistent amount of compute usage (measured in dollars per hour) for a one or three-year term.
There are three types of Savings Plans:
1. **Compute Savings Plans**: The most flexible option, providing up to 66% savings. These apply to any EC2 instance usage regardless of region, instance family, operating system, or tenancy. They also cover AWS Fargate and AWS Lambda usage.
2. **EC2 Instance Savings Plans**: Offer up to 72% savings but require commitment to a specific instance family within a chosen AWS Region. You still have flexibility to change instance size, operating system, and tenancy within that family.
3. **SageMaker Savings Plans**: Apply to Amazon SageMaker usage, offering up to 64% savings on ML instance usage.
Key benefits of Savings Plans include:
- **Flexibility**: Unlike Reserved Instances, Savings Plans automatically apply to eligible usage across services and configurations.
- **Simple Management**: AWS Cost Explorer helps recommend the right Savings Plan based on your historical usage patterns.
- **Automatic Application**: Savings are automatically applied to qualifying usage, making billing straightforward.
Payment options include All Upfront (highest discount), Partial Upfront (moderate discount), and No Upfront (lowest discount but no initial payment required).
You can purchase Savings Plans through the AWS Cost Explorer console, where you can also monitor utilization and coverage. AWS provides recommendations based on your usage history to help optimize your commitment amount.
Savings Plans are ideal for organizations with predictable compute workloads who want to reduce costs while maintaining operational flexibility across their AWS infrastructure.
AWS Savings Plans
What are AWS Savings Plans?
AWS Savings Plans are a flexible pricing model that offers significant savings on AWS compute usage compared to On-Demand pricing. They provide up to 72% savings on your AWS compute costs in exchange for a commitment to a consistent amount of usage (measured in dollars per hour) for a 1-year or 3-year term.
Why are AWS Savings Plans Important?
Understanding Savings Plans is crucial because: - They represent one of the most cost-effective ways to reduce AWS bills - They offer more flexibility than Reserved Instances - They are frequently tested on the AWS Cloud Practitioner exam - They apply across multiple compute services, making them versatile for organizations
Types of Savings Plans
1. Compute Savings Plans: - Most flexible option - Apply to any EC2 instance regardless of region, instance family, operating system, or tenancy - Also apply to AWS Fargate and AWS Lambda usage - Offer up to 66% savings
2. EC2 Instance Savings Plans: - Lower flexibility but higher savings - Require commitment to a specific instance family in a specific region - Offer up to 72% savings - Flexibility within the instance family for size, OS, and tenancy
3. SageMaker Savings Plans: - Apply to Amazon SageMaker usage - Offer up to 64% savings on SageMaker instances
How AWS Savings Plans Work
1. Commitment: You commit to a specific hourly spend amount (e.g., $10/hour) for 1 or 3 years 2. Payment Options: Choose between All Upfront, Partial Upfront, or No Upfront payment 3. Application: Your Savings Plan rate is automatically applied to qualifying usage 4. Beyond Commitment: Any usage beyond your commitment is charged at On-Demand rates
Savings Plans vs Reserved Instances
- Savings Plans offer more flexibility than Reserved Instances - Reserved Instances are tied to specific instance types and regions - Savings Plans automatically apply to usage across services and regions (for Compute plans) - Both require 1-year or 3-year commitments
Exam Tips: Answering Questions on AWS Savings Plans
Key Points to Remember:
1. Flexibility vs Savings Trade-off: Compute Savings Plans = more flexibility, EC2 Instance Savings Plans = higher savings but less flexibility
2. Commitment Terms: Only 1-year or 3-year terms are available; longer terms provide greater discounts
3. Service Coverage: Remember that Compute Savings Plans cover EC2, Fargate, and Lambda
4. When to Choose Savings Plans: Look for scenarios mentioning consistent compute usage, cost optimization, or flexibility requirements
5. Payment Options: All Upfront provides the maximum discount, No Upfront provides the least discount but more cash flow flexibility
6. Watch for Keywords: Questions mentioning flexible pricing, compute cost reduction, or hourly commitment often point to Savings Plans
7. Distinguish from Reserved Instances: If a question emphasizes flexibility across instance types, regions, or services, Savings Plans is likely the answer
8. Cost Explorer Integration: AWS Cost Explorer provides Savings Plans recommendations based on your usage patterns
Common Exam Scenarios: - A company wants to reduce costs but needs flexibility to change instance types = Compute Savings Plans - An organization has predictable EC2 usage in a specific region = EC2 Instance Savings Plans - A startup wants cost savings with minimal upfront payment = Savings Plans with No Upfront option