AWS Savings Plans

AWS can be cost-effective, but it can also become expensive if not managed well. One of the methods to control costs is AWS Savings Plans. Let's dive into what Savings Plans are and how they can help you optimize costs.

What Are AWS Savings Plans?

Savings Plans are a flexible pricing model that offer low prices on EC2, Lambda, and other compute usage. Unlike Reserved Instances, they're more adaptable to changes in your compute usage.

Types of Savings Plans

1. Compute Savings Plans: Provides flexibility to change instance family, OS, and region.
2. EC2 Instance Savings Plans: More rigid but offer higher savings; bound to specific instance families and regions.

Benefits

1. Cost Reduction: Up to 72% savings compared to on-demand pricing, but normally 30% for a 1-year commitment and 50% for a 3-year commitment.
2. Flexibility: Easy to adapt to changes in your architecture.
3. No Upfront Costs: Opt for no upfront payment, partial, or full to suit your budget.

How to Implement

Step 1: Analyze Usage

Use AWS Cost Explorer to understand your usage patterns.

Step 2: Choose a Plan

Pick between Compute Savings Plans and EC2 Instance Savings Plans based on your needs.

Step 3: Set Commitment

Set your commitment level in terms of $/hour for a 1-year or 3-year term.
A $1/hour commitment for three years means a total commitment of $26,280.
Please note that the commitment to AWS is per hour, so you need a flat $1/h compute usage for 3 years if you decide to purchase your own Savings Plan, while with Cloud Family, you don't need any commitment and you can leave anytime.

Step 4: Purchase and Monitor

Buy the Savings Plan and monitor its performance through AWS Cost Explorer.

Risks and Considerations

• Commitment Length: You're committing to usage for a 1 or 3-year term.
• Overcommitting: Avoid purchasing more than you need.

Conclusion

AWS Savings Plans can be a powerful tool for cost optimization if used correctly. Analyze, choose, and commit wisely.

Better up, use Cloud Family to handle Savings Plans for you! Read more on our product CloudSaver.

Further Reading

1. AWS Savings Plans Documentation
2. AWS Cost Explorer Guide