AWS Savings Plan Estimation

Savings Plan is a new flexible model of AWS to save money on the use of computing services. It applies to EC2 services regardless of AWS family, size, OS, region and also to other computing services such as Fargate and ECS. It offers more than one type of plan over different durations and automatically adopts to computing usage. With the Savings Plan, AWS customers commit to a cost per dollar measured per hour over 1 to 3 years.

There are 2 types of Savings Plans: Compute Savings Plans and EC2 Instance Savings Plan.

Compute Savings Plan

Compute saving plan is highly flexible and and offers savings up to 66%, which is applied for EC2 and fargate instances. Its flexibility includes instance family, size, OS, tenancy, region and AZ. We can also move the EC2 instance to AWS fargate with the compute savings plan. It’s like the RI’s convertible.

For example, one can change from c4 to m5 instances from Asia Mumbai to EU Ireland.

EC2 Instance Savings Plan

EC2 savings plan provides less flexible but affordable rates and offers savings of up to 77% that can reach highest savings plan discounts. Its flexible to change usage within a family in a region. One must commit to individual instance family in a region and downgrade, the instance can be upgraded as well, it’s more like the Standard RI’s.

For example, you can migrate from a c5.xlarge that uses Windows to a c5.2xlarge that runs on Linux.

Comparison of Reserved Instances vs Savings plans.

Here is the case study of savings estimated and recommended for an existing workload of On Demand compute.  The below table shows the sample savings between the compute savings plans for 1yr/3yr, and the steps after, shows the comparison and recommendations that was made on price commitment and the estimated final savings

Case Study: Comparison between Estimated OnDemand spend with Compute Savings Plan for 1 year & 3 years savings

Considering the given customer operates multiple region and has plans migrate to containers(AWS Fargate) in next 3 months, Compute Savings plan was chosen over the EC2 Savings plan.

Recommendation

From the above we can see their current On-Demand spend per hour is 1.77 $/hour.

Without changing the usage pattern for the next 1 year

• 1 year Compute Savings plan with a commitment of $1.329 / hour
• Savings are $0.44 per hour, which could result to an estimated savings of $3928 annually for a year
• Results in net 25% savings

Without changing the usage pattern for the next 3 years

• 3 years Compute Savings plan with a commitment of $0.924 / hour
• Savings are $0.85 per hour, which could result to an estimated annual savings of $7542 for 3 years
• Results in net 48% savings

In view of the risks of business growth, the need for flexibility and the opportunity

to further optimize the application, the final recommendation follows :

• 1 year Compute savings plan with a commitment of $0.99 / hour
• Savings are $0.315 per hour, which could result to an estimated annual savings of $2810.
• Results in net 18% savings and retaining ability to further optimize the spend on OnDemand by application fine tuning, about $0.462 per hour over the next 1 year.

Conclusion

Once a commitment to the Savings Plan has been made, it cannot be modified.

Also additional commitments can be made on the basis of new business growth projections.

It is therefore necessary to consider growth risk aspects, duration of 1 year vs. 3 years and mix and match EC2 vs. Compute savings plan, before making a savings plan commitment and benefiting from savings.

Reach 1CloudHub consultants as we can help you to choose the right AWS plans and optimize your utilization and spending accordingly.

Reference: https://docs.aws.amazon.com/savingsplans/latest/userguide/what-is-savings-plans.html

Written by :

Mahavishnu G & Umashankar N