AWS Reserved Instances (RI) vs Elastic Cloud Computing (EC2) Instance Savings Plan: Maximize Cost Savings

Authors:?Abhigyan Bhattacharjee, Solution Architect, Stovl Consulting

Saravanan Mani, VP Technology, Stovl Consulting

Executive Summary:

For EC2 Instances AWS offers multiple plans, like On-Demand, Reserved Instances (RI), Savings Plan, Spot Instances and Dedicated Hosts. While Reserved Instances can offer the maximum savings, there are other options with less stringent commitments. This article explores the pros and cons of EC2 RI vs EC2 Instance Savings plan.

Introduction:

The cost of AWS EC2 instances depends on several factors, including the instance type, region, usage duration, and pricing model. On-Demand pricing is popular, but it is the highest priced option. The AWS Pricing Calculator and AWS Simple Monthly Calculator are good tools for estimating the costs of EC2 instances for your targeted requirements. On one end there is the In On-Demand plan, customers pay the regular hourly rate for the resources they consume without any long-term commitments. The other end is a RI which reserves an EC2 instance, but you get a cheaper rate for the commitment.

What are the plans that offer good discounts?

• Reserved Instances (RI) and Savings Plan both require a long-term commitment and provide maximum cost saving.
• Both plans require a 1-year / 3-year term commitment.
• A RI allows customers to reserve and receive discounted pricing.
• An EC2 Savings Plan is a flexible pricing option at a discounted rate.
• Both offer 3 payment options: ?All Upfront, Partial Upfront and No Upfront.
• Both plans offer discounts in exchange for commitments.
• The plans offer flexibility in modifying the plans and autoscaling.?

The following table compares the primary characteristics of these plans:

Conclusion:

If workloads are predictable and can commit to specific instance types, RIs can offer higher discounts.

Whereas EC2 Instance Savings Plans are a better fit when flexibility in instance types and maximum savings across numerous services are needed.

Irrespective of the option chosen, careful planning and regular evaluation of usage patterns will help maximize AWS cost savings.

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