05/05/2023 Benjamin Van der Maas

Making The Right Commitments to AWS: Reserved Instances vs. Savings Plans

When it comes to AWS, there are different types of commitments that can help you make the most out of your cloud budgets. Two of the most popular ones are Reserved Instances and Savings Plans. A Reserved Instance is like a coupon that you purchase and consume at a lower price, while a savings plan requires you to commit to a certain hourly spend for a year or three years. 

The difference lies in your consumption pattern. If you have a stable load that runs continuously, committing to a specific stable consumption per hour might make sense. But if you have a more fluctuating pattern, a reserve instance might be a better option.

Reserved Instances

Reserved Instances come in two types: standard and convertible. Standard Reserved Instances allows you to commit to a specific instance type with some flexibility in size. Convertible Reserved Instances, on the other hand, lets you convert to another instance type within the year or three-year commitment period, as long as it is equally or more expensive. Savings Plans also come in different types, but the big ones are compute Savings Plans and EC2 Savings Plans. The former groups your consumption of EC2, Fargate, and Lambda into a total hourly consumption, while the latter is more suitable for stable workloads.

Savings Plans

Compute Savings Plans are the most flexible option available since they cover a bigger variety of services and only look at the dollar amount you’re using. As long as you reach the dollar amount within those services, you’ll get a discount. However, the discount you get is lower compared to EC2 Savings Plans or Reserved Instances. EC2 Savings Plans, on the other hand, are very similar to Reserved Instances except for the way you consume your commitment. It’s more suitable for stable workloads, such as running websites.

In summary, choosing the right cloud computing commitment, reservation, or savings plan depends on your consumption pattern. If you have a stable load, EC2 Savings Plans or reserved instances might be suitable. If you have a more fluctuating pattern, a compute savings plan might be a better option.

More on AWS Commitments

We recently recorded and uploaded a livestream titled Saving on AWS Through Commitment Strategies. Learn more about this topic by clicking the video!



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