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AWS has recently introduced Savings Plans, which offer an alternative way to save money on cloud costs than purchasing Reserved Instances (RIs). By using RIs, it is possible to achieve savings of up to 72% compared to On Demand prices. When usage goes above what has been reserved in advance, the additional usage is charged at On Demand rates. Savings Plans similarly allow businesses to make savings of up to 72% compared to On Demand prices.
At launch, businesses can only take advantage of Savings Plans on EC2 and Fargate services, so they will not be suitable for every AWS customer. To take advantage of Savings Plans, it is necessary to make a commitment of between 1 and 3 years and you will receive a discount for that commitment.
Under Savings Plans, rather than committing to a certain amount of usage, as is the case with RIs, customers are committing to a minimum dollar per hour spend, for example, $10 per hour. As with RIs, usage above the usage committed to under Savings Plans is charged at the On Demand rate. Savings Plans are automatically applied where the greatest savings can be made, and you are not tied to a specific instance. Savings Plans eliminate the complexity associated with RIs as less planning is required to determine what instances you need.
CloudHealth has been working closely with AWS ahead of the rollout of Savings Plans and the CloudHealth platform supports Savings Plans at the time of launch. Customers can see how much Savings Plans can save them and make an informed decision about whether RIs or Savings Plans are the better choice.
CloudHealth customers can view upfront fees, recurring fees, and credits, and determine their EC2 and Fargate compute spend after the Savings Plan discounts have been applied. It is possible to see which accounts get the benefit of Savings Plans through Cost History Savings Plan Reports.
AWS applies Convertible RIs to EC2 usage before applying Savings Plans, so it is important to proactively manage Convertible RIs alongside Savings Plans to get the best value out of both. Cloud Health’s Convertible Reservation Exchanger can be used to determine which convertible RIs need to be exchanged and what they should be exchanged with, and then the exchanges can be executed with the click of a button.
Since the new offering may be confusing, CloudHealth has set up a Strategic Savings Desk. Contact the Strategic Savings Desk and you can speak to expert advisors who will explain how Savings Plans work, how to get the best discounts, and how best to manage the discounts.
CloudHealth’s engineering team is currently working on a host of new features to help customers make data-driven AWS Savings Plan purchases, and the Partner Billing Engine will soon receive an upgrade to allow MSPs to take full advantage of Savings Plans.