(Last Updated On: November 9, 2019)

A service has been provided by Reserved instances (RIs) for businesses that anticipate the use of a set level of AWS infrastructure resources, for cost certainty. But this is on the complex side, AWS’ Jeff Barr had explained. To fix this complex issue, Savings Plans was introduced by the company.

In a blog post that announced the new program, Barr had said: “Today we are launching Savings Plans, a new and flexible discount model that provides you with the same discounts as RIs, in exchange for a commitment to use a specific amount (measured in dollars per hour) of computing power over a one or three year period,”

A few different ways of charging customers are available from Amazon, such as the on-demand price. Most organisations know when they need a fixed amount of resources so that they are able to save money by buying in bulk. This helps Amazon to preplan and know the level of usage.

Reserved Instances might not be ending, Amazon does have other plans to get their customers in a new direction towards Saving Plans. Barr said, “We will continue to sell RIs, but Savings Plans are more flexible and I think many of you will prefer them,”

There are two types of Savings Plans. Up to 66% savings is issued through Compute Savings Plans in a similar way to RIs. Customers will enjoy that savings can be applied among AWS products, and workloads can be moved between regions while continuing the same discount rate.

The second is the EC2 Instance Savings Plans. Although similar to the reserved plan, up to 72% can be saved on top of the on-demand price. With this option though, you will need to stick to a single region. Although certain flexibility is offered, that lets you choose different sizes of the same instance type or switching operating systems from Windows to Linux without this affecting your discount with your choice of region.

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