AWS Savings Plans: Your Ultimate Guide

Cloud on-demand pricing gives you the flexibility to pay only for the resources you use and scale up or down as needed. It’s great for staying agile, but it can also lead to higher costs compared to other pricing models. To help manage these costs, AWS offers several discount plans like Reserved Instances (RIs), Savings Plans, and Spot Instances. For example, Savings Plans can give you cost predictability while still allowing some flexibility in how you use your resources, and Spot Instances can significantly lower your costs if you’re okay with some usage limitations.

Choosing the right pricing model is key because each one is designed for different needs and comes with its own pros and cons. To make the best choice, it’s important to really understand your cloud usage patterns, know what discount options are available, and align everything with your business goals.

This blog will help you explore the basics of AWS Savings Plan, its advantages, types, and guide you on how to effectively start implementing them. Read on to discover the details.

Table of Contents

1. What Are AWS Savings Plans?
2. What Are the Benefits of the AWS Savings Plan?
3. What Are the Different Types of AWS Savings Plans?
4. How To Get Started With AWS Savings Plans
5. How Finout Can Help You Optimize AWS Savings Plans

What Are AWS Savings Plans?

AWS Savings Plans are a long-term discount pricing model that provides a flexible and cost-effective way to manage your AWS resources. By committing to a steady usage amount (measured in dollars per hour) over a one or three-year term, users can benefit from substantial discounts compared to On-Demand pricing. Savings Plans can offer discounts up to 72% for EC2 Instance Savings Plans, which are tailored for specific instance families in a particular region, and up to 66% for Compute Savings Plans, which are more flexible and apply across various services like EC2, AWS Lambda, and AWS Fargate​

In addition to cost savings, Savings Plans enhance operational flexibility by allowing changes in instance types, operating systems, and regions without affecting the discount received. The usage commitment is measured in the amount spent per hour ($ per hour), making them ideal for dynamic environments where computing resources can fluctuate but the spend per hour remains predictable. Tools like AWS Cost Explorer assist in managing these plans by offering tailored recommendations based on usage patterns.

What Are the Benefits of the AWS Savings Plan?

Here are the key advantages of adopting the AWS Savings Plans:

• Flexibility: Unlike Reserved Instances which require commitment to specific resources, AWS Savings Plans offer adaptability by allowing discounts across various AWS services with a simple $/hour commitment. This flexibility is crucial for businesses with dynamic cloud usage, as it enables them to shift resources freely without sacrificing cost savings.
  
  
• Financial Management: Savings Plans simplify financial management by focusing on a dollar-per-hour commitment rather than specific instance configurations. This approach streamlines budgeting and forecasting, enabling finance teams with better cost control.
  
  
• Cost Optimization: Savings Plans can reduce cloud costs significantly, with potential savings of up to 72% compared to On-Demand pricing. This makes them an effective strategy for cloud cost management.
  
  
• Comprehensive Reporting: AWS offers detailed utilization and coverage reports that help users monitor their Savings Plans and, identify opportunities for further cost reductions.

In short, AWS Savings Plans not only help you save money but also keep your operations flexible and your financial management straightforward.

What Are the Different Types of AWS Savings Plans?

AWS offers three types of Savings Plans, each designed to meet different needs:

These plans offer the broadest flexibility, allowing up to 66% savings on your AWS bill. They cover various services such as EC2, Fargate, and Lambda. What makes them particularly flexible is that they apply regardless of changes in instance family, size, region, or operating system. This means you can switch between different configurations and still benefit from the plan’s discounted pricing.

These plans offer the deepest discounts, up to 72%, and are more restrictive compared to Compute Savings Plans. EC2 Instance Savings Plans require a commitment to specific instance families within a particular AWS region but allow flexibility in changing the size, OS, or tenancy within that family. While they lack the broader applicability of Compute Savings Plans, they offer deeper discounts and are ideal for predictable workloads that have stable requirements regarding the instance type and region.

Amazon SageMaker Savings Plans

Tailored for users with significant machine learning workloads on SageMaker, these plans can reduce costs by up to 64%. They cover various SageMaker services such as Studio Notebook, On-Demand Notebook, Processing, Data Wrangler, Training, Real-Time Inference, and Batch Transform. The flexibility of SageMaker Savings Plans allows users to change between different instance types or geographical locations without affecting the discount rate, thus accommodating the dynamic nature of machine learning projects.

Choosing the right plan depends on your specific needs. For instance, if your usage is variable and spans multiple services, Compute Savings Plans would be most beneficial. Conversely, if your usage is stable and focused on specific EC2 instances, the EC2 Instance Savings Plans would offer the best cost savings​. Ultimately, the best fit would depend on your individual needs. Thus, understand the details of each plan and compare the use cases to choose the right option for your organization.

For more details on the types of AWS Savings Plans, you can check out AWS Documentation.

How To Get Started With AWS Savings Plans

To start with an AWS Savings Plan, here are the simple steps:

1. Log in to your AWS Management Console and access the AWS Cost Management dashboard.
2. Use AWS Cost Explorer to analyze your current and historical usage.
3. Check the Savings Plans recommendations provided based on your usage.
4. Choose between Compute, EC2 Instance, or SageMaker Savings Plans, depending on your needs.
5. Decide on the plan duration—either one or three years—with options for no upfront, partial upfront, or all upfront payments.
6. Purchase your selected Savings Plan directly through the AWS Console.
7. Regularly review your Savings Plan's performance and make adjustments to optimize savings.

How Finout Can Help You Optimize AWS Savings Plans

Optimizing your AWS Savings Plans can be a challenge, but Finout provides the tools and insights you need to maximize your savings and minimize waste. With advanced features like My Commitments and CostGuard, Finout helps you stay in control of your AWS costs and ensure you’re getting the most out of your Savings Plans.

1. My Commitments: Finout’s My Commitments feature offers a clear, real-time overview of your AWS Savings Plan commitments. It helps you track your usage against your plan and ensures you’re making the most of your commitments without under- or over-utilizing your resources. This feature allows you to visualize current and historical commitments, making it easier to forecast future usage and adjust your Savings Plan to match your actual needs.

By leveraging My Commitments, you can:

• Monitor your current Savings Plan utilization.
• Identify opportunities to adjust your commitments for better savings.
• Plan for future commitments based on historical usage trends.

2. CostGuard: Finout’s CostGuard feature is designed to detect and recommend areas of waste across your cloud costs, including your AWS resources. By identifying idle or underutilized resources, CostGuard helps you eliminate unnecessary spending and optimize your Savings Plans. This ensures that every dollar committed to your Savings Plan is working efficiently for your business.

With CostGuard, you can:

• Receive real-time recommendations on waste reduction.
• Identify unused or underutilized resources that are costing you.
• Continuously optimize your infrastructure to make the most of your Savings Plan.

3. Comprehensive AWS Cost Visibility: Finout provides a complete view of your AWS costs, enabling you to drill down into specific applications, teams, or services. This granular visibility allows you to align your Savings Plan with your actual resource usage, ensuring you’re only paying for what you truly need and benefiting fully from your AWS Savings Plan.

With Finout, you can confidently manage your AWS Savings Plans, eliminate waste, and maximize your cloud cost savings.