AWS Savings Plans are a flexible pricing model that offers significant cost savings compared to On-Demand pricing in exchange for a commitment to a consistent amount of compute usage over a one or three-year term. This commitment is measured in dollars per hour rather than specific instance types o…AWS Savings Plans are a flexible pricing model that offers significant cost savings compared to On-Demand pricing in exchange for a commitment to a consistent amount of compute usage over a one or three-year term. This commitment is measured in dollars per hour rather than specific instance types or configurations.
There are three types of Savings Plans available:
1. **Compute Savings Plans** - These provide the most flexibility with up to 66% savings. They apply to any EC2 instance usage regardless of region, instance family, operating system, or tenancy. They also cover AWS Fargate and Lambda usage.
2. **EC2 Instance Savings Plans** - These offer up to 72% savings but require commitment to a specific instance family within a chosen region. However, you retain flexibility in size, operating system, and tenancy within that family.
3. **SageMaker Savings Plans** - These apply specifically to Amazon SageMaker usage with similar flexibility benefits.
Key benefits of Savings Plans include:
- **Automatic Application**: Savings are automatically applied to eligible usage across your accounts when using AWS Organizations consolidated billing.
- **Flexibility**: Unlike Reserved Instances, you can change instance types, sizes, and even services while maintaining discounts.
- **Cost Optimization**: AWS Cost Explorer provides recommendations based on your historical usage patterns to help you select the optimal commitment level.
When implementing Savings Plans, SysOps Administrators should analyze usage patterns using AWS Cost Explorer, which shows potential savings and coverage percentages. You can purchase plans through the AWS Cost Management console and monitor utilization through Savings Plans utilization reports.
Savings Plans work alongside Reserved Instances and On-Demand capacity. Reserved Instance discounts apply first, followed by Savings Plans, with remaining usage charged at On-Demand rates. This layered approach helps organizations maximize cost efficiency while maintaining operational flexibility for their AWS workloads.
Savings Plans - Complete Guide for AWS SysOps Administrator Associate
Why Savings Plans Are 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 SysOps Administrators, understanding Savings Plans is crucial because cost management is a core responsibility, and this knowledge is frequently tested in the certification exam.
What Are Savings Plans?
Savings Plans are a flexible pricing model that offers significant discounts on AWS compute usage in exchange for a commitment to a consistent amount of 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 - Apply to EC2, Lambda, and Fargate usage - Discounts up to 66% - Apply across any region, instance family, size, OS, or tenancy
2. EC2 Instance Savings Plans - Apply only to EC2 instances - Discounts up to 72% - Commitment to a specific instance family in a chosen region - Flexible across size, OS, and tenancy within that family
3. SageMaker Savings Plans - Apply to Amazon SageMaker usage - Discounts up to 64% - Flexible across instance family, size, region, and component
How Savings Plans Work
1. Commitment Model: You commit to a specific hourly spend (e.g., $10/hour) for 1 or 3 years
2. Payment Options: - All Upfront: Highest discount - Partial Upfront: Medium discount - No Upfront: Lowest discount but most cash flow flexibility
3. Application of Discounts: Savings Plans rates are applied to your usage in order of highest to lowest discount. Any usage beyond your commitment is charged at On-Demand rates.
4. Coverage: AWS Cost Explorer shows recommendations and tracks utilization of your Savings Plans
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 commit to a dollar amount rather than specific instances - Both offer similar discount levels for comparable commitments
Key AWS Services for Managing Savings Plans
- AWS Cost Explorer: View recommendations, purchase plans, and monitor utilization - AWS Budgets: Set alerts for Savings Plans utilization and coverage - AWS Cost and Usage Reports: Detailed analysis of Savings Plans benefits
Exam Tips: Answering Questions on Savings Plans
Tip 1: When a question mentions needing flexibility across regions, instance families, or compute services (EC2, Lambda, Fargate), Compute Savings Plans is typically the correct answer.
Tip 2: If the scenario describes workloads that will stay in a specific region with a consistent instance family, EC2 Instance Savings Plans offer the deepest discounts.
Tip 3: Questions about maximizing discounts while maintaining operational flexibility often point to Savings Plans over Reserved Instances.
Tip 4: Remember the commitment is in dollars per hour, not instance hours. This is a key differentiator from Reserved Instances.
Tip 5: For questions about monitoring and recommendations, AWS Cost Explorer is the primary tool for Savings Plans management.
Tip 6: 3-year terms always provide higher discounts than 1-year terms. All Upfront payments provide the highest discounts within each term length.
Tip 7: If a question asks about cost optimization for serverless workloads (Lambda) or containers (Fargate), only Compute Savings Plans apply - EC2 Instance Savings Plans do not cover these services.
Tip 8: Savings Plans are applied automatically to eligible usage. There is no manual association required after purchase.