AWS Savings Plans help cloud users to save more from their AWS budgets. Anyone can save significant amounts using ordinary pricing plans and discounted offers. However, it’s equally important to note the difference between pricing models and Savings Plans. Discounted offers are usually temporary and can be as short as a one-month free trial.

AWS’ Savings Plans, on the other hand, involve steady long-term commitments. For example, AWS Savings Plans let you buy an Elastic Compute Cloud at lower costs. Like Reserved pricing, AWS bills you in dollars per hour per instance. That is as long as you commit to a specific usage amount.

Reserved Instances will require constant monitoring to ensure you get the best value, whereas Savings Plans are automatic.

How Do Savings Plans Work?

  • Users make long-term commitments ranging from one year to three years.
  • You can commit to paying $0.05 per hour for an EC2. AWS will assign the needed compute capacity.
  • You’ll commit to using the agreed capacity per hour. If you exceed this usage, AWS will use On-Demand billing for extra charges.
  • The plans are ideal for steady processes and offer flexible prices.
  • If you feel the need to break a commitment, you can choose a new plan.

What Are the Benefits of AWS Savings Plans?

  • AWS lets you review the best Savings Plan recommendation on the AWS Cost Explorer. These recommendations come from usage patterns, making them the most effective options.
  • They’re heavily discounted. You can receive a discount of up to 70 percent off compared with typical On-Demand rates.
  • They eliminate the need for checking historical price charts before buying instances.
  • They are flexible. AWS uses machine learning technology to offer recommendations. There are various payment options, including no upfront, upfront, and partial payments. You can also customize the length of commitment and types of Savings Plans. They include a Compute Savings Plan, an EC2 Savings Plan, and Amazon SageMaker.

Let’s look at the Savings Plans and how you can use them.

Use the Compute Savings Plan to Reduce Cloud Costs

Instead of getting EC2 discounts alone, you can get cost-saving benefits with the Compute Savings Plan. This plan saves costs on AWS resources, such as EC2 and Fargate. It’s also applicable to AWS Lambda. Sometimes, large organizations experience high fees because they’re in multiple AWS regions. But with the Compute Savings Plan, you can cut data transfer costs within multiple AWS regions.

Use EC2 Instance Savings Plans to Reduce Cloud Costs

This plan only applies to the usage of the Elastic Compute Cloud. All users are eligible for the 72 percent discount rate on all types of EC2. Users have to commit to two conditions:

  1. You will be using a specific type of instance over one to three years.
  2. You must stay within one region. If you move to another, data transfer costs will apply.

Also, AWS lets you customize the Operating System, memory size, and other EC2 elements. Therefore, you only pay for what you’ll need, hence cutting costs.

Use Amazon SageMaker to Reduce Cloud Costs

Amazon Sagemaker involves machine learning. You can only apply it to Amazon SageMaker. AWS gives up to a 64 percent discount when running machine learning applications compared with the conventional price. As a result, you can access various services at a discount. These include:

  • Studio and On-Demand Notebook
  • SageMaker training
  • SageMaker Data Wrangler
  • SageMaker Processing.

The Bottom Line

While there are myriad ways to cut cloud costs, you still have to understand the foundations of reducing them. Without a good foundation, all other cloud optimization techniques might increase costs.

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