Savings Plans are a flexible pricing model offered by AWS that can significantly reduce compute costs compared to On-Demand pricing. For Solutions Architects, understanding Savings Plans selection is crucial for optimizing existing solutions and achieving cost efficiency.
There are three types of …Savings Plans are a flexible pricing model offered by AWS that can significantly reduce compute costs compared to On-Demand pricing. For Solutions Architects, understanding Savings Plans selection is crucial for optimizing existing solutions and achieving cost efficiency.
There are three types of Savings Plans to consider:
1. **Compute Savings Plans**: These offer the most flexibility, providing up to 66% savings. They apply to any EC2 instance regardless of region, instance family, operating system, or tenancy. They also cover AWS Fargate and Lambda usage, making them ideal for dynamic workloads.
2. **EC2 Instance Savings Plans**: These provide up to 72% savings but require commitment to a specific instance family within a region. They offer less flexibility but greater discounts for predictable workloads.
3. **SageMaker Savings Plans**: Specifically designed for machine learning workloads, offering up to 64% savings on SageMaker usage.
When selecting Savings Plans for continuous improvement, consider these factors:
- **Commitment Term**: Choose between 1-year or 3-year terms. Longer commitments yield higher discounts.
- **Payment Options**: All Upfront provides maximum savings, Partial Upfront offers moderate savings, and No Upfront provides flexibility with lower discounts.
- **Usage Analysis**: Use AWS Cost Explorer to analyze historical usage patterns and receive Savings Plans recommendations based on actual consumption.
- **Coverage Strategy**: Combine Savings Plans with Reserved Instances and Spot Instances for optimal cost optimization across different workload types.
For existing solutions, regularly review Savings Plans utilization through Cost Explorer dashboards. Monitor coverage percentages and adjust commitments as workloads evolve. Consider starting with Compute Savings Plans for maximum flexibility, then layer EC2 Instance Savings Plans for stable, predictable baseline workloads.
Best practices include purchasing Savings Plans incrementally, maintaining some On-Demand capacity for unexpected growth, and conducting quarterly reviews to align commitments with changing business requirements.
Savings Plans Selection for AWS Solutions Architect Professional
Why Savings Plans Selection is Important
Savings Plans represent one of the most significant cost optimization strategies in AWS, offering up to 72% savings compared to On-Demand pricing. For Solutions Architects, understanding how to select the right Savings Plan is crucial for designing cost-effective architectures that meet both technical and financial requirements. This knowledge is essential for the AWS Solutions Architect Professional exam, as cost optimization is a core domain.
What are AWS Savings Plans?
AWS Savings Plans are flexible pricing models that provide significant discounts in exchange for a commitment to a consistent amount of compute usage (measured in dollars per hour) for a 1 or 3-year term. There are three types of Savings Plans:
1. Compute Savings Plans - Most flexible option with up to 66% savings - Apply across EC2, Lambda, and Fargate - Apply regardless of instance family, size, OS, tenancy, or region - Ideal for workloads with changing compute requirements
2. EC2 Instance Savings Plans - Up to 72% savings - Apply to a specific instance family within a chosen region - Flexible across size, OS, and tenancy within that family - Best for predictable workloads with consistent instance family usage
3. SageMaker Savings Plans - Apply to Amazon SageMaker usage - Up to 64% savings on SageMaker instances
How Savings Plans Work
Savings Plans work through a commitment-based model:
1. Commitment: You commit to a specific hourly spend amount (e.g., $10/hour) for 1 or 3 years
3. Application: AWS automatically applies Savings Plans to eligible usage, prioritizing the highest discount first
4. Coverage: Usage up to your commitment receives discounted rates; usage beyond is charged at On-Demand rates
Selection Criteria
When selecting Savings Plans, consider:
- Workload Predictability: Stable workloads benefit from EC2 Instance Savings Plans; variable workloads suit Compute Savings Plans - Flexibility Requirements: Choose Compute Savings Plans if you anticipate changing instance types, regions, or moving to containers/serverless - Commitment Duration: 3-year terms offer greater discounts but less flexibility - Payment Preference: All Upfront maximizes savings but requires capital - Historical Usage Analysis: Use AWS Cost Explorer recommendations based on past usage patterns
Exam Tips: Answering Questions on Savings Plans Selection
Key Scenarios to Recognize:
1. When a question mentions maximum flexibility with cost savings, think Compute Savings Plans
2. When a question specifies a single instance family in one region with predictable usage, think EC2 Instance Savings Plans
3. Questions involving Lambda or Fargate cost optimization point to Compute Savings Plans since EC2 Instance Savings Plans do not cover these services
4. For scenarios with unpredictable growth or potential architecture changes, Compute Savings Plans provide necessary flexibility
Common Exam Traps:
- Do not confuse Savings Plans with Reserved Instances; Savings Plans are commitment-based on spend, not specific instances - Remember that EC2 Instance Savings Plans are region-specific - Savings Plans do not cover all AWS services; they focus on compute resources
Decision Framework for Exam Questions:
1. Identify the compute services mentioned (EC2, Lambda, Fargate, SageMaker) 2. Assess flexibility requirements mentioned in the scenario 3. Look for keywords like cost optimization, long-term commitment, or predictable workloads 4. Consider whether the architecture might evolve or remain static 5. Match the scenario to the appropriate Savings Plan type
Remember: The exam tests your ability to select the most cost-effective solution while meeting technical requirements. Always balance savings potential against operational flexibility based on the specific scenario presented.