How do Savings Plans compare to EC2 RIs?
Compute Savings Plans, just like Convertible RIs provide savings up to 66% and automatically reduce your cost on any EC2 instance usage, regardless of region, instance family, size, OS, tenancy and even on AWS Fargate. Regional flexibility and AWS Fargate coverage are key advantages of Compute Savings Plans as compared to Convertible RIs.
EC2 Instance Savings Plans, which provide savings up to 72% (just like Standard RIs), automatically save you money on any instance usage within a given EC2 instance family in a chosen region (e.g. M5 in N. Virginia) regardless of size, OS or tenancy. Having OS and Windows instance size flexibility are key advantages of EC2 Savings Plans.
Standard RIs have the ability to be traded in the AWS marketplace, giving you the option to sell these in case of reduced compute needs in the future.
Convertible RIs have the ability to refinance them for longer term to reduce hourly commitment as well as upsizing ability to handle seasonal workloads. E.g. if you have one year convertible RIs for $100/hr with 6 months remaining, you can refinance them to a full 1 year or 3 year term and reduce your hourly commitment to $50/hr for a full one year term or $16.67/hr for a full 3 year term.
This flexibility of reserved instances combined with Savings Plans simplicity enables you to get the highest savings, enabling you to meet the timelines of your digital transformation goals.
Can I manage my existing EC2 RIs with the same simplicity of Savings Plans?
Yes, with Cloudwiry’s Savings Maximizer, your existing portfolio of EC2 Convertible Reserved instances are managed with the same simplicity of Savings Plans and are automatically exchanged to get the highest savings.
Can I accelerate adoption of EC2 Savings Plans from existing RIs?
Yes, with Cloudwiry’s Savings Maximizer, you can list your existing Standard RIs on marketplace and refinance your existing convertible RIs to a smaller hourly commitment. E.g. if you have 3 year convertible RIs with hourly commitment of $100/hr with 12 months remaining, these can be refinanced to $33.33/hr for three years, enabling higher percentage of your coverage to be on Savings Plans.
Can I continue to purchase EC2 RIs?
Yes. You can continue purchasing RIs to maintain compatibility with your existing cost management processes, and your RIs will work along-side Savings Plans to reduce your overall bill. WIth Cloudwiry’s RI maximizer, your Convertible RIs are managed with the same simplicity as Savings Plans and provide an additional refinance flexibility to reduce your monthly run rate, enabling higher savings.
Why would I purchase RIs now?
You will get higher savings by increasing coverage with Convertible Reserved Instances while mitigating the risk with refinance potential of Convertible RIs to reduce coverage to target when needed. Additionally, RIs allow you to target specific instance type for targeted savings.
Can I sell / trade / reduce hourly commitment ( refinance ) Savings plans?
No you cannot.
Can I sell / trade / reduce hourly commitment ( refinance ) Reserved Instances?
You can sell / trade Standard Reserved Instances in marketplace and refinance convertible reserved instances to reduce coverage / hourly commitment.
What are the tradeoff for Savings Plans vs RIs?
Savings Plans cannot be restricted to a particular instance type and Compute savings plans cannot be scoped to a specific region. While you can restrict Savings Plans to the account they have been purchased in, you risk wasting some of your investment if there is not enough compute demand in that account. If you need to cover a specific instance type, e.g. your Production Windows Workloads on m5.2xlarge instances, RIs may be a better choice to ensure that only one cost center benefits. Also, given the lack of marketplace or the ability to refinance (lower hourly commitment for a given savings plan), pure Savings Plan only coverage could potentially cause wasted dollars specially for the highest savings available for the 3 year term.
What payment options are available to pay for Savings Plans?
Savings Plans are available in 3 different payment options. The No Upfront option does not require any upfront payment, and your commitment will be charged purely on a monthly basis, in the account that Savings Plans are purchased. The Partial Upfront option offers lower prices on Savings Plans and with this option you have to pay at least half of your commitment upfront and the remaining will be charged on a monthly basis. Partial upfront has the flexibility to prepay a higher amount for planning purposes upto 99%. With the All Upfront option, you will receive the highest savings and your entire commitment will be charged in one payment.
How do Savings Plans work with AWS Organizations/Consolidated Billing?
Savings Plans can be purchased in any account within an AWS Organization/Consolidated Billing family. By default, the benefit provided by Savings Plans is applicable to usage across all accounts within an AWS Organization/consolidated billing family. However, you can also choose to restrict the benefit of Savings Plans to only the account that purchased them. If restricted, all the savings plan benefits must be consumed within the same account.
Do Savings Plans provide capacity reservations for EC2 instances?
No, Savings Plans do not provide a capacity reservation. You can however reserve capacity with On Demand Capacity Reservations and pay lower prices on them with Savings Plans.
How is Cloudwiry managing this change?
Cloudwiry’s customers have enjoyed most of the flexibility of savings plans with Cloudwiry’s RI maximizer, with automated conversions and low true up costs. Combined together with the power of Savings Plans, Cloudwiry’s customers continue to get simplicity of management, maximum savings and they also retain the flexibility to reduce hourly commitment if needed.
Cloudwiry insulates our customers from all the changes in Cloud Cost management and supports all FinOps needs while limiting the time investment to only a few minutes a week:
- Cloud Financial Planning for the next 1-5 years
- Billing Summary Dashboard
- Cost trend analysis & anomaly detection
- Custom reports, chargebacks & Invoicing
- Rightsizing & Zombie Asset management
How do Cloudwiry’s recommendations for purchasing Savings Plans work?
Purchase planning for the next 1-5 years for RIs & Savings Plans requires balancing various tradeoffs to find the right answer for your specific needs (See chart below). Cloudwiry does detailed analysis of your needs and trends to ensure maximum savings with minimum risk.
By combining detailed analysis of historical data with your plans for the future, you will have the confidence that your AWS costs are fully optimized by Cloudwiry’s AutoPilot, even as you compute coverage needs due to:
- Digital transformation and PaaS & Serverless migration
- OS Changes (Windows to Linux moves)
- Regional workload shift impact
- Instance family changes
- Economic cycle impact
- Seasonality impact
How do I purchase a Savings Plan?
Savings Plans can be purchased directly from Cloudwiry application or AWS Cost Explorer Console. Our Technical Account Managers work with our customers to understand their needs and configure our Autopilot to purchase and maintain coverage with Savings Plans and RIs.
What If I have RIs & Savings Plans in my accounts?
AWS will apply any available RIs in the Savings Plan purchasing account first based on their match, this is done to ensure that your RIs is consumed first before SPs given SPs have more flexibility. Cloudwiry ensures that you still get the highest discounts across the comination of RIs & Savings Plans with mixed terms (e.g. you get an extra 8% discount savings if you apply 1 year RIs to windows m5 workloads vs linux when you have 1 year cRIs & 3 year Savings plan).
Also, SP’s apply to the purchasing account first (account affinity), highest to lowest discounted instances. Any unused coverage would ‘float’ or share to other linked accounts. It will search for the highest available discount in linked accounts and apply highest to lowest until the commitment is used. Cloudwiry adjusts the recommendations based on your accounting & discount needs.
Are RIs going away?
AWS will still offer RIs in parallel with Savings Plans. Currently, AWS Savings Plan is only available for EC2 instances and Fargate compute engines, but as AWS adds support for more services, Savings Plan adoption is likely to increase. RIs are expected to be available for purchase in the foreseeable future.
Can I mix Savings Plan and RIs in the same payer / account?
Yes – you can have all different types of Savings Instruments in your accounts
How do Savings Plans work with Enterprise Discount Program customers?
Similar to RIs, Customers with Enterprise Discount Program (EDP) will have their EDP discounts stacked on top of the Savings Plan discount.
Are Savings Plans available for GovCloud customers?
Yes. But, you can only purchase GovCloud region Savings Plans for the standard account—not in the GovCloud account.
When you apply a Savings Plan to multiple instance types, which type gets the discount first?
AWS applies Savings Plans from the highest discount instance to lowest discount instance in the Account in which Savings Plans were purchased. If there is unused commitment, AWS will apply it to other accounts in your organization.
Do savings plan recommendations vary across accounts for savings plan ?
Yes as the application of RIs & Savings plans depends on which account they are purchased in, the recommendations may vary.
Can savings plan partially cover an instance and can multiple savings plan cover an instance?