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AWS Savings Plans Decoded: Choosing the Right Commitment for You

Every business wants to save money on their monthly AWS bill and the various types of savings plans are a good way to do that. However, they can be a bit hard to decode and check that they are right for your scenarios.

There are automatic recommendations generated for admins in the AWS portal, but how do you know if they will be right for your business?

In this blog post, we'll decode AWS Savings Plans and guide you on choosing the right commitment for your unique needs.

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At IG CloudOps, we leverage our expertise to assist you in this crucial decision-making process, ensuring optimal cost savings tailored to your current and future requirements.

Understanding AWS Savings Plans

AWS Savings Plans are a flexible and cost-effective pricing model designed to provide significant savings compared to traditional on-demand pricing. They offer a choice between Compute Savings Plans and EC2 Instance Savings Plans, allowing users to commit to a consistent amount of compute usage (measured in $/hr) for a 1 or 3-year term. For a handy table showing a comparison follow this link to AWS' site.

Compute Savings Plans vs. EC2 Instance Savings Plans

Compute Savings Plans: Ideal for businesses with flexible workloads, Compute Savings Plans provide a significant discount (up to 66%) in exchange for a commitment to a consistent dollar amount per hour, regardless of instance family, size, or region. This option is well-suited for users with a dynamic mix of EC2 instance types.

EC2 Instance Savings Plans: If your organisation has predictable and steady-state workloads, EC2 Instance Savings Plans may be more suitable. These plans offer a discount in exchange for a commitment to a specific instance family in a chosen region.

EC2 & Compute savings plans vs. Reserved Instance (RI) Plans 

AWS Savings Plans, including Compute Savings Plans and EC2 Instance Savings Plans, represent a paradigm shift in cost optimisation when compared to the traditional Reserved Instance (RI) plans.

While RIs require users to commit to specific instance types, families, and operating systems for a fixed term, Savings Plans offer a more flexible approach. Compute Savings Plans provide substantial discounts (up to 66%) for a commitment to a consistent dollar amount per hour, irrespective of instance type, size, or region.

On the other hand, EC2 Instance Savings Plans grant discounts in exchange for a commitment to a specific instance family within a chosen region. Unlike RIs, both Savings Plans allow users to benefit from the discounts across a broader range of instance types, providing greater flexibility and adaptability to dynamic workloads. This flexibility makes Savings Plans a more versatile and user-friendly option, enabling businesses to achieve significant cost savings while maintaining agility in their cloud usage.

At IG CloudOps, we specialise in guiding organisations through this transition, helping them harness the full potential of AWS cost optimisation.

Choosing the Right Commitment

Selecting the appropriate commitment is crucial for maximising savings while aligning with your business goals. Here are key considerations when making this decision:

  1. Workload Analysis: Evaluate your current workload and usage patterns. Are they more variable or consistent? This analysis will guide you toward either Compute or EC2 Instance Savings Plans.

  2. Term Length: Consider your organisation's long-term plans. A 1-year commitment might be suitable for projects with shorter lifecycles, while a 3-year commitment offers more significant savings for stable, long-term workloads.

  3. Flexibility Requirements: If your workloads are diverse and change frequently, the flexibility of Compute Savings Plans might be more advantageous. For stable workloads with minimal changes, EC2 Instance Savings Plans provide a more predictable cost structure.

How IG CloudOps Can Help

At IG CloudOps, we understand that deciphering the intricacies of AWS Savings Plans can be challenging. Our experienced AWS team is here to guide you through the decision-making process. We take into account your current workload, future growth projections, and budget constraints to recommend the most suitable Savings Plan for your unique situation.

Our cloud management platform provides comprehensive insights into your cloud resources, enabling us to identify opportunities for optimisation. We work collaboratively with your team to ensure a seamless transition to AWS Savings Plans, minimising disruptions while maximising AWS cost efficiency.


Choosing the right AWS Savings Plan commitment is a strategic decision that requires a thorough understanding of your organisation's unique requirements. By decoding the differences between Compute and EC2 Instance Savings Plans and considering factors like workload analysis, term length, and flexibility requirements, you can make an informed choice.

At IG CloudOps, we bring our expertise to the table, helping you navigate this complex landscape and choose a Savings Plan that not only saves you money but also aligns seamlessly with your current and future cloud computing needs. Let us be your partner in optimising costs and maximising the benefits of AWS Savings Plans.

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