Optimizing Performance and Cost Using AWS Compute Savings Plans

Managing cloud costs effectively is a key aspect of leveraging AWS services to their full potential. With various payment options, AWS provides flexibility for organizations to optimize their spending. However, for businesses seeking long-term cost efficiency and predictability, AWS Savings Plans emerge as a powerful tool. This blog delves into the fundamentals of Compute Savings Plans, their benefits, and actionable strategies to implement them for cost and performance optimization.

What are AWS Compute Savings Plans?

AWS Compute Savings Plans are a flexible pricing model that allows businesses to save up to 66% on their compute usage compared to On-Demand pricing. In exchange for committing to a consistent amount of compute usage (measured in USD per hour) over a one- or three-year term, organizations unlock significant discounts. These plans cater to various workloads, making them suitable for businesses with predictable or steady-state usage patterns.

Types of AWS Savings Plans

AWS offers multiple types of Savings Plans tailored to different workloads:

Compute Savings Plans

These plans provide the highest flexibility, automatically applying to compute usage across EC2 instances, Fargate, and Lambda. They are not limited by:

• • Instance family (e.g., m5, c5)
  • Instance size (e.g., c5.large, c5.xlarge)
  • AWS Region (e.g., us-east-1, eu-west-1)
  • Operating system (e.g., Windows, Linux)
  • Tenancy (e.g., Dedicated, Default, Dedicated Host)

With Compute Savings Plans, you can easily shift workloads between instance families, regions, or even migrate from EC2 to Amazon ECS using Fargate, maintaining discounted rates across services.

EC2 Instance Savings Plans

These plans are tailored for specific EC2 instance families within chosen regions. They allow changes within the same instance family, such as resizing (e.g., from c5.xlarge to c5.2xlarge), switching operating systems (e.g., from Windows to Linux), or adjusting tenancy (e.g., from Dedicated to Default), offering a more focused but still flexible cost optimization solution.

SageMaker AI Savings Plans

These plans are specifically designed for SageMaker workloads and apply automatically to instance families (e.g., ml.m5, ml.c5), instance sizes (e.g., ml.c5.large, ml.c5.xlarge), regions, and components like Notebooks or Training. They enable flexibility to move workloads, switch regions, or transition between components such as Training and Inference while continuing to benefit from the cost savings.

Key Benefits of Savings Plans

• Significant Cost Savings: Organizations can reduce their compute costs drastically by committing to consistent usage.
• Flexibility Across Services: Compute Savings Plans support a broad range of services, including EC2, Lambda, and Fargate, offering unparalleled adaptability.
• Simplified Billing: A unified billing structure streamlines cost management and savings tracking.

Flexible Terms and Payment Options

AWS Compute Savings Plans offer:

• Commitment Terms: Choose between one-year and three-year commitments. The three-year term provides higher discounts.
• Payment Options:
• No upfront payment: Pay monthly with minimal initial investment.
• Partial upfront payment: Lower your monthly charges by paying part of the commitment upfront.
• All upfront payment: Maximize savings with the lowest total cost by paying the full amount upfront.

How to Choose the Right Savings Plan

Selecting the right Savings Plan involves analyzing your usage patterns and future requirements:

1. Review AWS Recommendations: Use the “Recommendations” tab in the AWS Billing and Cost Management Console to identify optimal commitment levels.
2. Understand Workload Needs: Assess whether Compute Savings Plans or EC2 Instance Savings Plans align better with your workload requirements and desired flexibility.

How to Purchase a Savings Plan

1. Navigate to the AWS Billing Console: Log in to your AWS Management Console and go to the Billing section.
2. Select Savings Plans: Under the “Savings Plans” tab, review the available options.
3. Choose the Right Plan: Determine the commitment term, payment option, and dollar-per-hour commitment that best suits your workload.

Review and Purchase: Confirm the details and complete the purchase.

Enabling and Sharing AWS Savings Plans

AWS Savings Plans can be activated at different levels:

• Individual Account Level: Apply directly to a single account.
• Organization Level: Share across all accounts in your AWS Organization, ensuring cost-efficiency across teams.

If your account lacks permissions to enable a Savings Plan, you can activate it on one account and enable sharing with other accounts.

Conclusion

AWS Compute Savings Plans empower organizations to achieve an optimal balance between cost-efficiency and performance. By analyzing your workload requirements, selecting the right plan, and following best practices, you can unlock significant savings while maintaining a robust cloud infrastructure. Take the first step today and explore AWS Compute Savings Plans to enhance your cloud journey.