Comparison Of Reserved Instances vs. AWS Saving Plans

CloudHealth Tech Staff Cloud Tech Journalist
Published: December 01, 2019
5 Min Read

Our comparison of Reserved Instances vs. AWS Saving Plans illustrates the similarities and the differences between AWS´ existing discount program and its new one in order for businesses to easily identify which of the two options will maximize cost efficiencies in their specific circumstances.  

In November 2019, Amazon Web Services introduced AWS Saving Plans - describing them as “a new flexible pricing model” with discounts of up to 72 percent on EC2 and Fargate services compared to On Demand pricing. To take advantage of the new pricing model, businesses have to make a one-year or three-year commitment, and any usage over the committed usage is charged at On Demand rates.

The introduction of AWS Saving Plans is fantastic news for businesses using AWS´ Fargate service for containers because - provided there is a steady state level of operation - the Saving Plans will reduce AWS bills considerably. As we saw in our eBook “Trends in AWS Spending 2019” CloudHealth customers now spend six times as much on container services than they did a year ago.

What about businesses using EC2 Reserved Instances?

However, business using Standard and Convertible Reserved Instances for EC2 services might not appreciate the differences between the existing discount program and the new one - especially as the percentage discounts being offered by AWS are exactly the same whichever discount program is used - as are the same full, partial, or no upfront payment options.

Consequently, we have prepared a comparison of Reserved Instances vs. AWS Saving Plans to illustrate the similarities and differences between the two discount programs. To provide a better like-for-like picture of the discount programs, we have divided the comparison into two. The first half compares Standard Reserved Instances vs. EC2 Instances Saving Plans, while the second half compares Convertible Reserved Instances vs. AWS Compute Savings Plans.

First, a couple of things to point out

The first thing to point out in our comparison of Reserved Instances vs. AWS Saving Plans is that, at present, only EC2 instances and Fargate usage is eligible for AWS Saving Plans. If your business is using Reserved Instances to save money on the cost of RDS instances, AWS Redshift, or ElastiCache services, you will have to continue using Reserved Instances until the new discount program is extended to these services.

The second point to note is that, rather than committing to a specific amount of utilization - as you would with a Reserved Instance - when you purchase a AWS Saving Plans, you are committing to a minimum dollar per hour spend. Depending on the type of Savings Plan purchased, you may have to commit to using the Savings Plan for EC2 instances in a specific family and in a specific region.

Standard Reserved Instances vs. EC2 Instances Saving Plans

Regional Standard Reserved Instances and EC2 Instances Saving Plans share many of the same attributes inasmuch as they offer the highest level of discounts, but are region-specific and family-specific. The primary difference between the two is that EC2 Instance Saving Plans are automatically applied to any tenancy or operating system starting with the highest available discount first.

With regard to capacity reservations, with EC2 Instances Saving Plans you do not have the option of assigning Saving Plans to a specific Availability Zone in order to reserve capacity. However, if you use On Demand Capacity Reservations, the discounts can be applied to these instead. For some businesses, this will make the decision to purchase EC2 Instances Saving Plans a no-brainer.

Read our ebook about utilizing Savings Plans here

Comparison of Standard Regional RIs vs. Standard Zonal RIs vs. EC2 Instances Saving Plans

standard regional RIs vs standard zonal RIs vs savings plans table

Convertible Reserved Instances vs. AWS Compute Saving Plans

AWS Compute Saving Plans are similar to Convertible RIs inasmuch as they offer lower discounts for greater flexibility compared to EC2 Instance Saving Plans. However, compared to Convertible Reserved Instances, AWS Compute Saving Plans offer total flexibility across any AWS region - making them a great option for businesses with consolidated accounts across multiple regions.

However, whereas unutilized Convertible Reserved Instances and Standard Reserved Instances can be sold in the Amazon EC2 Reserved Instance Marketplace, the option does not exist (at present) to list unutilized AWS Compute Savings Plans or EC2 Instances Saving Plans in order to recover upfront payments. For some businesses, this may influence the decision to stick with Reserved Instances.

Comparison of Convertible Regional RIs vs. Convertible Zonal RIs vs. AWS Compute Saving Plans

Comparison of Convertible Regional RIs vs. Convertible Zonal RIs vs. AWS Compute Saving Plans

A few final considerations

There are multiple takeaways from our comparison of Reserved Instances vs. AWS Saving Plans depending on the nature of your business and its current fleet of Standard or Convertible Reserved Instances. We´ve listed a few below, but if you have any specific questions about whether Reserved Instances or AWS Saving Plans may be better for your business, do not hesitate to get in touch.

  • EC2 Instance Saving Plans are applied automatically to spend across any tenancy and any operating system.
  • You can use EC2 Instance Saving Plans against the cost of running On Demand Capacity Reservations in a single Availability Zone.
  • AWS Compute Saving Plans are applied automatically to any sized EC2 instance in any family, across any tenancy and OS, and in any region.
  • Due to their flexibility, AWS Compute Saving Plans eliminate the management overhead of manually modifying and exchanging Convertible Reserved Instances, but may be more challenging to track and allocate benefits.
  • At present, you cannot re-sell underutilized AWS Saving Plans in the Amazon EC2 Reserved Instance Marketplace.

Finally, if AWS Saving Plans are a better option for your business, you do not have to wait until existing RIs expire before being able to take advantage of them. AWS Saving Plans can be added in layers. So, if there are predictable workloads in your AWS environment that are not yet covered by RIs, it makes sense to purchase a Saving Plan now and add to it as RIs expire. The minimum commitment per purchase is one tenth of a cent ($0.001) per hour, so most businesses will be in a position to try the new discount program today. Again, if you have any questions about this, do not hesitate to get in touch.

CloudHealth Tech Staff, Cloud Tech Journalist

The CloudHealth Tech Staff team is made up of industry experts who report on trending cloud news, offer cloud management best practices, and compare products and services across the major cloud providers. As a part of CloudHealth, the CloudHealth Tech Staff come from all different backgrounds making them unique leaders in this industry.

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