AWS Cloud Services - Savings Plans & EC2 RIs (NU, PU, AU) in AWS

Srinivasa Raju Addepalli's photo
Srinivasa Raju Addepalli
ยทJun 26, 2022ยท

5 min read

AWS Cloud Services - Savings Plans & EC2 RIs (NU, PU, AU) in AWS

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AWS Cloud Core Services - Amazon EC2 Reserved Instances (NU, PU, AU)

In today's world, we are concerned about the cloud pricing. Let's discuss about EC2 Instance purchasing options, EC2 Instance Reserved Instances payment options - NU, PU, AU) & Compute Savings Plans.

EC2 Instance purchasing options

Amazon EC2 provides the following purchasing options to enable you to optimize your costs based on your needs:

On-Demand Instances

Pay, by the second, for the instances that you launch.

Savings Plans

Reduce your Amazon EC2 costs by making a commitment to a consistent amount of usage, in USD per hour, for a term of 1 or 3 years.

Reserved Instances

Reduce your Amazon EC2 costs by making a commitment to a consistent instance configuration, including instance type and Region, for a term of 1 or 3 years.

Spot Instances

Request unused EC2 instances, which can reduce your Amazon EC2 costs significantly.

Dedicated Hosts

Pay for a physical host that is fully dedicated to running your instances, and bring your existing per-socket, per-core, or per-VM software licenses to reduce costs.

Dedicated Instances

Pay, by the hour, for instances that run on single-tenant hardware.

Capacity Reservations

Reserve capacity for your EC2 instances in a specific Availability Zone for any duration.

Spot Instances are a cost-effective choice if we can be flexible about when our applications run and if they can be interrupted. Dedicated Hosts or Dedicated Instances can help us to address compliance requirements and reduce costs by using our existing server-bound software licenses.

If we require a capacity reservation, purchase Reserved Instances or Capacity Reservations for a specific Availability Zone.

Amazon EC2 Reserved Instances

Reserved Instance is not an instance dedicated to our organization. It is a billing discount applied to the use of On-Demand Instances in our account. We pay for the entire term of a Reserved Instance, regardless of actual usage, so our cost savings are closely tied to use. Therefore, it is important to plan and monitor our usage to make the most of our investment.

When we purchase Reserved Instances, we make a one-year or three-year commitment and receive a billing discount of up to 72 percent in return. When used for the appropriate workloads, Reserved Instances can save us a lot of money.

When we purchase a Reserved Instance in a specific Availability Zone, it provides a capacity reservation. A Reserved Instance purchased for an AWS Region does not provide capacity reservation.

EC2 Reserved Instances purchase options

Reserved Instances provide you with a significant discount (up to 72%) compared to On-Demand Instance pricing. In addition, when Reserved Instances are assigned to a specific Availability Zone, they provide a capacity reservation, giving you additional confidence in your ability to launch instances when you need them.

Standard and Convertible Reserved Instances Pricing

Standard Reserved Instances provide you with a significant discount (up to 72%) compared to On-Demand Instance pricing, and can be purchased for a 1-year or 3-year term. Customers have the flexibility to change the Availability Zone, the instance size, and networking type of their Standard Reserved Instances.

Purchase Convertible Reserved Instances if you need additional flexibility, such as the ability to use different instance families, operating systems, or tenancies over the Reserved Instance term. Convertible Reserved Instances provide us with a significant discount (up to 66%) compared to On-Demand Instances and can be purchased for a 1-year or 3-year term.

Reserved Instances Payment Options

We can purchase Reserved Instances through the AWS Management Console. The following payment options are available for most Reserved Instances:

No Upfront

No upfront payment is required. No Upfront Reserved Instances are based on a contractual obligation to pay monthly for the entire term of the reservation. We will be billed a discounted hourly rate for every hour within the term, regardless of whether the Reserved Instance is being used. A successful billing history is required before purchase No Upfront Reserved Instances.

Partial Upfront

A portion of the cost must be paid up front and the remaining hours in the term are billed at a discounted hourly rate, regardless of whether youโ€™re using the Reserved Instance.

All Upfront

Full payment is made at the start of the term, with no other costs or additional hourly charges incurred for the remainder of the term, regardless of hours used.

Reserved Instances with a higher upfront payment provide greater discounts. We can also find Reserved Instances offered by third-party sellers at lower prices and shorter terms on the Reserved Instance Marketplace.

Compute Savings Plans

Savings Plans offer a flexible pricing model that provides savings on AWS usage. We can save up to 72 percent on our AWS compute workloads. Compute Savings Plans provide lower prices on Amazon EC2 instance usage regardless of instance family, size, OS, tenancy, or AWS Region.

When we sign up for Savings Plans, the prices we will pay for usage stays the same through the plan term. We can pay for your commitment using All Upfront, Partial upfront, or No upfront payment options.

We can use AWS Cost Explorer to view our recommended Savings Plans commitment, purchase Savings Plans, manage our Savings Plans, and view our historical AWS usage. These recommendations make it easy for us to know the optimal Savings Plans commitment level.

Compute Savings Plans are a flexible pricing model that offers low prices, just like Amazon EC2 Reserved Instances (RI), but with added flexibility. With Savings Plans, you can reduce your bill by committing to a consistent amount of compute usage (measured in $/hour), instead of specific instance configurations. Savings Plans give us the flexibility to use the compute option that best suits our needs at low prices, without having to perform exchanges or modifications

Compute Savings Plans provide savings up to 66 percent off On-Demand, similar to Convertible RIs. Compute Savings Plans automatically reduce our cost on EC2 instance usage, Fargate, and Lambda. EC2 Instance Savings Plans offer savings up to 72 percent off of On-Demand, similar to Standard RIs. They also automatically save us money on any instance usage within a given EC2 instance family in our Region of choice.

Comparing Savings Plans and RIs

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References:

EC2 Pricing - aws.amazon.com/ec2/pricing

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