Savings Plans
Key concepts
Compute Savings Plans
EC2 Instance Savings Plans
SageMaker Savings Plans
Flexibility vs discount
Savings Plans vs Reserved
Overview
AWS Savings Plans offer a flexible pricing model with significant discounts (up to 72%) in exchange for a commitment to a consistent amount of usage ($/hour) for 1 or 3 years. Unlike Reserved Instances, Savings Plans are based on dollar commitment rather than specific instance configurations.
Core Concept
Savings Plans work on a dollar commitment (e.g., $10/hour for 1 year) rather than instance commitment. Compute Savings Plans offer maximum flexibility (any region, any instance, plus Lambda and Fargate). EC2 Instance Savings Plans offer higher discounts but lock you to an instance family and region.
When exam questions mention 'flexibility to change instance families, regions, or use Lambda/Fargate' while still getting discounts, Compute Savings Plans is the answer. When the scenario mentions 'committed to a specific instance family' but wants flexibility in size/OS, EC2 Instance Savings Plans applies.
Key Concepts
Types of Savings Plans
Compute Savings Plans
Coverage: EC2, Fargate, and Lambda (any region, any configuration)
Maximum Discount: Up to 66%
Flexibility:
- Any EC2 instance family, size, OS, tenancy
- Any AWS region
- Applies to Fargate and Lambda usage
- Automatically applies to most cost-effective usage first
Key Features:
- Most flexible savings option
- No need to specify instance details
- Ideal for workloads that may change or migrate
- Covers containerized and serverless workloads
Best For:
- Organizations with evolving infrastructure
- Multi-region deployments
- Mixed EC2 + Lambda + Fargate workloads
- Companies planning cloud modernization
EC2 Instance Savings Plans
Coverage: EC2 only, specific instance family and region
Maximum Discount: Up to 72%
Flexibility:
- Any instance SIZE within the family
- Any operating system
- Any tenancy (shared, dedicated, host)
- Single region commitment
Commitment Required:
- Instance family (e.g., m5, c5, r5)
- Region (e.g., us-east-1)
- NOT locked to: size, OS, or tenancy
Best For:
- Stable workloads with known instance family needs
- Single-region deployments
- Maximum savings with moderate flexibility
- Organizations with predictable compute patterns
SageMaker Savings Plans
Coverage: Amazon SageMaker ML instances
Maximum Discount: Up to 64%
Applies To:
- SageMaker Studio Notebooks
- SageMaker On-Demand Notebooks
- SageMaker Processing
- SageMaker Data Wrangler
- SageMaker Training
- SageMaker Real-Time Inference
- SageMaker Batch Transform
Flexibility:
- Any instance family, size, or region
- Automatically applies to eligible SageMaker usage
Best For:
- Organizations with significant ML workloads
- Teams using SageMaker for production ML
Savings Plans vs Reserved Instances
Savings Plans vs Reserved Instances
| Feature | Compute SP | EC2 Instance SP | Standard RI | Convertible RI |
|---|---|---|---|---|
| Max Discount | 66% | 72% | 72% | 66% |
| Commitment Type | $/hour | $/hour | Instances | Instances |
| Region Flexibility | Any | Fixed | Fixed | Fixed (exchange) |
| Instance Family Flex | Any | Fixed | Fixed | Exchange only |
| Instance Size Flex | Any | Any | Modify only | Exchange only |
| OS Flexibility | Any | Any | Fixed | Exchange only |
| Lambda/Fargate | Yes | No | No | No |
| Sell on Marketplace | No | No | Yes | No |
| Capacity Reservation | No | No | Yes (Zonal) | Yes (Zonal) |
When to Choose Each
Choose Compute Savings Plans When:
- Workloads span EC2, Lambda, and Fargate
- You may change instance families
- You may migrate between regions
- Maximum flexibility is priority
Choose EC2 Instance Savings Plans When:
- Workload is stable on known instance family
- Single region deployment
- Want higher discount than Compute SP
- Only need EC2 (no Lambda/Fargate)
Choose Standard Reserved Instances When:
- Need capacity reservation guarantee
- Want to resell on RI Marketplace
- Highest discount is priority
- Configuration won't change
Choose Convertible Reserved Instances When:
- Need capacity reservation
- May need to exchange configurations
- Configuration is likely to evolve
How Savings Plans Apply
Automatic Application
Application Order:
- Standard Reserved Instances (capacity reservation first)
- Convertible Reserved Instances
- Savings Plans (most expensive On-Demand first)
- Spot Instances (if applicable)
- On-Demand (remainder)
Optimization Logic:
- Savings Plans automatically apply to usage that provides maximum savings
- Most expensive eligible On-Demand usage covered first
- Updates hourly as usage changes
Example:
- Commitment: $10/hour Compute Savings Plan
- Running: c5.xlarge ($0.17/hr), m5.large ($0.096/hr), Lambda
- SP applies to c5.xlarge first (higher rate = more savings)
- Remaining commitment covers other usage
Scenario: Steady usage of 10x m5.large (Linux) running 24/7
Step 1: Calculate On-Demand hourly cost
- m5.large On-Demand: $0.096/hour
- 10 instances: 10 × $0.096 = $0.96/hour
Step 2: Choose Savings Plan type
- Compute SP discount: ~43% → $0.055/hour per instance
- EC2 Instance SP discount: ~53% → $0.045/hour per instance
Step 3: Calculate commitment
- Compute SP: 10 × $0.055 = $0.55/hour commitment
- EC2 Instance SP: 10 × $0.045 = $0.45/hour commitment
Step 4: Monthly/Yearly cost
- Compute SP: $0.55 × 730 hours = $401.50/month
- EC2 Instance SP: $0.45 × 730 hours = $328.50/month
- On-Demand: $0.96 × 730 hours = $700.80/month
Annual Savings:
- Compute SP: $3,592/year savings (43%)
- EC2 Instance SP: $4,467/year savings (53%)# List Savings Plans
aws savingsplans list-savings-plans
# Describe specific Savings Plan
aws savingsplans describe-savings-plans \
--savings-plan-ids sp-1234567890abcdef0
# Get Savings Plans utilization
aws ce get-savings-plans-utilization \
--time-period Start=2024-01-01,End=2024-01-31
# Get Savings Plans coverage
aws ce get-savings-plans-coverage \
--time-period Start=2024-01-01,End=2024-01-31
# Get Savings Plans purchase recommendation
aws ce get-savings-plans-purchase-recommendation \
--savings-plans-type COMPUTE_SP \
--term-in-years ONE_YEAR \
--payment-option NO_UPFRONT \
--lookback-period-in-days SIXTY_DAYSPayment Options
Savings Plans Payment Options
| Payment Option | Discount Level | Cash Flow | Best For |
|---|---|---|---|
| All Upfront | Highest | Pay full amount now | Maximum savings, available capital |
| Partial Upfront | Medium | Some now, rest monthly | Balance of savings and cash flow |
| No Upfront | Lowest | Monthly payments only | Preserve cash, still get savings |
Term Options
1-Year vs 3-Year Terms
1-Year Term
- Lower commitment risk
- Smaller discount (but still significant)
- Easier to adapt to changing needs
- Good for evolving workloads
3-Year Term
- Maximum discount potential
- Longer commitment period
- Best for stable, long-term workloads
- Higher risk if needs change
Recommendation:
- New workloads: Start with 1-year
- Proven stable workloads: Consider 3-year
- Uncertain growth: 1-year with review
Best Practices
- Start with Cost Explorer: Analyze usage patterns for 30+ days before purchasing
- Use Recommendations: AWS provides purchase recommendations based on historical usage
- Cover Baseline First: Size Savings Plans for consistent minimum usage, not peaks
- Combine Strategies: Use Savings Plans for steady-state, Spot/On-Demand for variable
- Monitor Utilization: Regularly check Savings Plans utilization in Cost Explorer
- Choose Based on Flexibility Needs: Don't over-commit if changes are likely
- Consider All Compute: Compute SP covers Lambda/Fargate; don't forget these
Common Exam Scenarios
Exam Scenario Decision Guide
| Scenario | Recommended Solution | Key Reasoning |
|---|---|---|
| Multi-region EC2 deployment, may migrate regions | Compute Savings Plans | Region flexibility needed |
| Steady m5 workload in us-east-1, size may change | EC2 Instance Savings Plans | Higher discount, locked to family/region is OK |
| EC2 now, planning Lambda migration | Compute Savings Plans | Covers both EC2 and Lambda |
| Need capacity guarantee in specific AZ | Reserved Instances (Zonal) | Only RIs provide capacity reservation |
| SageMaker training jobs varying in size | SageMaker Savings Plans | Specific to SageMaker workloads |
| Want to sell unused capacity later | Standard Reserved Instances | Only Standard RIs can be sold |
| Mixed Fargate + Lambda + EC2 workload | Compute Savings Plans | Covers all three services |
| Maximum savings, workload very stable | EC2 Instance SP (3-year, All Upfront) | Highest discount for stable workloads |
Common Pitfalls
Over-Commitment
Savings Plans charge for the committed amount whether you use it or not. Over-committing based on peak usage rather than baseline results in paying for unused commitment. Always size for minimum steady-state usage.
Wrong Plan Type Selection
Choosing EC2 Instance Savings Plans and then migrating to Lambda or Fargate means the Savings Plan doesn't apply. If you're considering containerization or serverless, choose Compute Savings Plans even though the discount is slightly lower.
Cannot Be Cancelled or Sold
Unlike Standard Reserved Instances, Savings Plans CANNOT be sold on a marketplace. Once purchased, you're committed for the full term. Plan carefully before purchasing.
No Capacity Reservation
Savings Plans do NOT provide capacity reservations. If you need guaranteed capacity in a specific AZ (e.g., for disaster recovery), you still need Reserved Instances or On-Demand Capacity Reservations.
Ignoring Lambda/Fargate Coverage
Organizations often purchase EC2 Instance Savings Plans without considering their Lambda or Fargate usage. Compute Savings Plans cover all three, potentially providing better overall value.
Related Services
Quick Reference
Savings Plans Comparison
| Plan Type | Max Discount | Applies To | Flexibility |
|---|---|---|---|
| Compute SP | 66% | EC2, Lambda, Fargate | Any region/family |
| EC2 Instance SP | 72% | EC2 only | Fixed family/region |
| SageMaker SP | 64% | SageMaker | Any region/family |
Key Terms
| Term | Description |
|---|---|
| Commitment | $/hour you commit to for the term |
| Utilization | % of commitment actually used |
| Coverage | % of eligible usage covered by SP |
| Term | 1 year or 3 years |
CLI Quick Reference
# Get purchase recommendations
aws ce get-savings-plans-purchase-recommendation \
--savings-plans-type COMPUTE_SP \
--term-in-years ONE_YEAR \
--payment-option NO_UPFRONT \
--lookback-period-in-days THIRTY_DAYS
# Check utilization
aws ce get-savings-plans-utilization \
--time-period Start=2024-01-01,End=2024-01-31 \
--granularity MONTHLY
# List active Savings Plans
aws savingsplans list-savings-plans --states active
Test Your Knowledge
A company runs EC2 workloads across multiple regions and is considering migrating some workloads to Lambda in the next year. Which pricing option provides BOTH savings and the required flexibility?
A company has stable production workloads running exclusively on m5 instances in us-east-1. They want MAXIMUM cost savings and don't plan to change instance families or regions. Which option provides the highest discount?
A company purchased EC2 Instance Savings Plans for $5/hour but their usage has dropped and they're only using $3/hour worth of compute. What happens to the unused $2/hour?
A startup needs guaranteed EC2 capacity in a specific Availability Zone for their disaster recovery setup. Which option provides BOTH cost savings AND capacity reservation?