AWS provides two mechanisms that offer huge discounts on compute workloads when you commit the usage for an extended period of time.
AWS Reserved Instances
For consistent workloads that are used 24×7, the reserved instances help you reduce your AWS compute cost.
Standard RI
Provides up to 72% discount to on-demand pricing based on the commitment period and upfront payment. It provides flexibility to change the Availability Zone, instance size, and networking type, but restricts changing the instance family and operating system. This can be purchased for a period of 1 year or 3 years with an option to pay the full amount upfront, or get reduced hourly costs by paying partially upfront or no upfront amount.
Convertible RI
Offers additional flexibility to Standard RI by allowing you to change the instance family, tenancy, and operating system. This provides AWS compute cost reduction benefits and also allows you to change upfront payment options. It offers up to 66% discount in comparison to on-demand instances, and can also be purchased for a period of 1 year or 3 years with an option to pay the full amount upfront, or get reduced hourly costs by paying partially upfront or no upfront amount.
Scheduled RI
Allows you to reserve capacity during peak (5% discount) and non-peak (10% discount) time periods on an hourly basis. It allows various schedules like daily, weekly, or monthly, with a specified start time and duration. The scheduled RI can be reserved for a 1 year term.
AWS Savings Plans
Savings plans offer additional flexibility over the Reserved Instances.
EC2 Instance Savings Plans
Offers up to 72% discount over on-demand instances for a commitment to use a specific instance family in a region. It provides flexibility to change availability zone, instance size, operating system or tenancy. It can be purchased for a period of 1 year or 3 years, with an option to pay the full amount upfront, or get reduced hourly costs by paying partially upfront or no upfront amount.
AWS Compute Savings Plans
Expands additional compute units like Lambda functions and Fargate in the savings plan. It does have restrictions on region or instance family. The EC2 instances cost reduces up to 66%, Fargate cost reduces up to 52%, and Lambda function cost reduces up to 17%. It can be purchased for a period of 1 year or 3 years with an option to pay the full amount upfront, or get reduced hourly costs by paying partially upfront or no upfront amount.
Conclusion
AWS Compute Savings Plans is the best financial tool to help you reduce the compute cost. It reduces the complexity and saves time for your team on infrastructure planning by removing the rigidity to commit to an instance family, region, etc. It also expands the scope for your team to be able to shift the workload to other compute units like Lambda functions and Fargate.
References
- Savings Plans – Amazon Web Services. (n.d.). Amazon Web Services, Inc. https://aws.amazon.com/savingsplans/
- Amazon EC2 Reserved Instances. (n.d.). Amazon Web Services, Inc. https://aws.amazon.com/ec2/pricing/reserved-instances/