[AWS] Reserved Instances vs. Savings Plans
With the introduction of Savings Plans by AWS in 2019, the question I frequently get as a cloud economist is, “How are reserved instances and savings plans different, and which one should I use?” Both options can be purchased for a 1-year or 3-year term and provide discounts of up to 72%. However, they exhibit a few differences, with the major ones being flexibility and the resources to which they can be applied.
Let’s examine Standard RI and EC2 SP since they offer the same discount rate when applied to the same instance. Both plans are region-specific and instance-family-specific. However, EC2 SP provides more flexibility in altering tenancy and operating system compared to Standard RI. While tenancy and operating system are fixed once Standard RI is purchased, EC2 SP is free from such constraints. Refer to Table 1 for details.
Similar to the relationship between Standard RI and EC2 SP, Compute SP provides more flexibility than convertible RI. While instance family, size, tenancy, and operating system can be altered for both, only Compute SP offers flexibility in changing regions. Refer to Table 2 for details.
Another advantage of SP is that they are applied automatically. Altering instance family, size, and other parameters should be executed manually for RIs, which can be burdensome. In contrast, it is done automatically for SPs. Although all the information presented before suggests that SPs may dominate RIs, there are still enough reasons not to move away from RIs. Depending on the users’ requirements, employing RIs can be a better option for the following reasons:
- Scope: Types of resources to which RI and SP can be applied are different. SP can only be applied to compute resources (EC2, Lambda, Fargate) and Sagemaker, while RI can be applied not only to compute resources (EC2) but also to other resources, including RDS.
- Resell: RIs can be purchased and sold on the AWS marketplace, while SPs cannot. This indicates that if you only need to run your instance for 3 months and want to utilize the plan, you are only left with RIs.
In conclusion, for now, neither RI nor SP is inherently superior to the other. Depending on the users’ requirements, employing RIs or SPs, or using both simultaneously, can be a great way to optimize cloud costs.
