aws savings plans

Using CloudHealth To Track And Manage AWS Savings Plans

Rachel Dines
Sr. Director of Product Marketing
Published:
Nov. 18, 2019
6 minute read

Last week, AWS announced a new approach to helping customers reduce their spending on compute -- which often accounts for the majority of a customers’ bill. This is big news to anyone interested in optimizing their cloud costs -- if you need a quick overview, check out my blog for everything you need to know about Savings Plans. In short, Savings Plans are another purchasing option that enables AWS customers to get a discount on their compute (EC2 or Fargate) spending, in exchange for an upfront commitment. Similar to Reservations, Savings Plans offer up to a 72% discount compared to On-Demand prices.

Learn best practices for how to be successul with AWS Savings Plans 

CloudHealth works with more than 7,000 customers to help them get visibility into their cloud environments to improve optimization and governance across cost, usage, performance, and security. As you can imagine, the interest and excitement surrounding AWS Savings Plans among our customers has been incredible. To support this excitement and interest, we’ve been working closely with AWS to provide support for Savings Plans in the CloudHealth Platform. Have a look at the capabilities CloudHealth already supports today and catch a glimpse of what our engineers are cooking up to demystify Savings Plan Management.

AWS Savings Plan Capabilities Available Today

CloudHealth is excited to support for Savings Plans at the time of launch. Our initial support has been focused on providing customer visibility into both Savings Plan fees, and savings achieved from Savings Plans. Specifically, our initial support includes:

Cost History Savings Plan Reports:

These provide visibility into Savings Plan upfront fees, recurring fees, and credits. Customers can see their net compute spend (EC2 and Fargate) after Savings Plans discounts, as well as the Savings Plans upfront and recurring fees. Customers can also see which accounts are receiving the benefit of the Savings Plan (note that Savings Plans will float across linked accounts).

Convertible Reservation Exchanger:

If you have Convertible Reservations in your portfolio, it’s critical to proactively manage them alongside Savings Plans to ensure you are getting the maximum value out of both investments, especially given that AWS will apply Convertible RIs to your EC2 usage before applying Savings Plans. You also want to make sure Convertible RIs are fully optimized and Exchanged before making additional commitments via Savings Plans. The CloudHealth Convertible Reservation Exchanger recommends which of your Convertible RIs should be Exchanged and what they should be Exchanged to. It can even group together Exchanges of Reservations that are expiring in the same month, so you don’t extend your Reservation term lengths. Then, with a click of a button, CloudHealth will make the Exchange on your behalf. 

Strategic Savings Desk:

Given the shift in the economic model and related challenges associated with it we saw the need for a set of expert advisors on-hand to help customers make the best decisions when it comes to Savings Plans. Since we have a team here at CloudHealth working closely with AWS, it was a no brainer to form the Strategic Savings Desk. The charter of this team is to advise customers on 1) how cloud provider discount offerings work, 2) how customers can get the best discount and 3) best practices to plan for and manage discounts. This is a complimentary service for CloudHealth customers. Get started today! Reach out to our team of Savings Plan experts and email cht-savingsdesk@groups.vmware.com

AWS Savings Plan Reporting and Analysis Capabilities In Development

The engineering team is hard at work developing the next phase of capabilities to enable customers to make data-driven AWS Savings Plan purchases. Here’s a peek at some of the capabilities actively being developed now:

EC2 Instance Cost & Usage Reports:

Provide consolidated visibility into EC2 cost and usage across Savings Plans, Reservations On-Demand, and Spot usage. Furthermore, customers will be able to highlight Savings Plan waste (i.e., periods when actual usage was less than committed Savings Plans, so discounts were not applied). 

Savings Plan Granular Allocation:

Like Reservations, Savings Plans will float across accounts and instances… but unlike Reservations, they can also float across Regions and even between instance families. This makes it somewhat challenging to track which teams got the benefit of a Savings Plan. Today, CloudHealth can track which account got the benefit of a Savings Plan during any given hour, but the next phase will include a more granular analysis of Savings Plan benefits. This will include tracking Savings Plan benefits down to a business unit, project, team, individual, and more leveraging Perspectives (logical business groupings).

Partner Billing Engine Updates:

More than 200 partners use CloudHealth to offer managed cloud services to their customers. They also use CloudHealth to bill and invoice those customers. This engine has initial support for Savings Plans today, but we’re working on updates to enable MSP partners to take full advantage of Savings Plans and provide value add services to their end customers.

What’s Next?

We’re working closely with our customers and prospects to understand how we can best help them with Savings Plans. Here are some of the questions related to Savings Plans we’ve identified that we’re working to answer:

  • How much should I invest in Savings Plans and how much will it save me? Where will the new Savings Plan apply?
  • What is my coverage rate now, and after? 
  • What is my blended discount rate now, and after? What is the marginal discount rate benefit of this additional $ commitment? 
  • What are my alternative Savings Plan options, and how do they compare in terms of the above?

Next Steps

Are you ready to learn more about Savings Plans? Join CloudHealth and AWS Product Managers Jonathan Morin (CloudHealth), Mike Giacometti (CloudHealth), and Pranesh Ramalingam (AWS) for an in-depth discussion of everything you need to know about AWS Savings Plans.