AWS Glossary
AWS Savings Plans
Flexible pricing commitment that reduces AWS costs by up to 72% compared to on-demand pricing.
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Summary
Flexible pricing commitment that reduces AWS costs by up to 72% compared to on-demand pricing.
Key Facts
- • Flexible pricing commitment that reduces AWS costs by up to 72% compared to on-demand pricing
- • ## How Savings Plans Work on AWS You commit to spending a minimum amount per hour (e
- • , $10/hour) for 1 or 3 years
- • AWS applies your Savings Plan to any eligible compute usage that matches your commitment level
- • **Example:** You purchase a $10/hour Savings Plan for 3 years
Entity Definitions
- Lambda
- Lambda is an AWS service relevant to aws savings plans.
- EC2
- EC2 is an AWS service relevant to aws savings plans.
Related Content
- AWS CLOUD COST OPTIMIZATION SERVICES — Related service
Definition
AWS Savings Plans are flexible pricing commitments that provide significant discounts (up to 72%) on AWS compute services (EC2, Fargate, Lambda) in exchange for agreeing to use a consistent amount of compute capacity over a 1 or 3-year term. Unlike Reserved Instances, Savings Plans apply across instance types, sizes, and regions, making them more flexible.
How Savings Plans Work on AWS
You commit to spending a minimum amount per hour (e.g., $10/hour) for 1 or 3 years. AWS applies your Savings Plan to any eligible compute usage that matches your commitment level. When you exceed your commitment, additional usage is charged at on-demand rates.
Example: You purchase a $10/hour Savings Plan for 3 years. You can use:
- 4 x m5.large instances at $2.50/hour each
- 10 x t3.micro instances at $1/hour each
- Mix of Fargate and Lambda tasks totaling $10/hour
- Any combination that stays within your hourly commitment
AWS automatically applies your Savings Plan to whatever compute instances you’re running, so you don’t need to manage reservations the way you do with Reserved Instances.
Common Mistakes
Mistake 1: Undercommitting to Savings Plans. You commit to $5/hour when your baseline usage is $8/hour, wasting the discount on $3/hour of usage.
Mistake 2: Purchasing Savings Plans without analyzing actual usage patterns. Savings Plans work best when you have predictable, consistent compute spend.
Mistake 3: Ignoring the flexibility. Savings Plans apply to any eligible instance type/size/region, so you can change infrastructure without breaking your commitment.
Related AWS Services
- EC2 Reserved Instances: For predictable usage of specific instance types
- AWS Compute Optimizer: Analyzes usage to recommend the right Savings Plan commitment
- Cost Explorer: Track Savings Plan coverage and utilization
Related FactualMinds Content
Related Services
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