How to combine Saving Plans and Reserved Instances

Written by

Aditya Datta

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Match made in heaven – Savings Plans + cRI = maximum savings + maximum flexibility

Now AWS provides two additional savings instruments to help customers save on their EC2 & Fargate compute needs. Host Reservations, Standard RIs, Convertible RIs, and the new EC2 Saving Plans and Compute Saving Plans.

With the proper tooling, Saving Plans and Convertible RIs are very similar, and almost all the questions are reduced to answer to how much money a customer wants to commit ($/h) and, for how long, and what is the level of tolerance to lock-in. Without the proper tooling, Saving Plans could be the most straightforward solution, but for really optimizing the ROI (net saving/ investment), keep reading.

Some of the options got practically deprecated with the introduction of Saving Plans. That is the case of the Standard RIs. Indeed, the only point of Standard RIs is the ability to sell them in the Marketplace, though with limited liquidity there, that market is limited. We are looking forward to understanding how it develops.

Choosing one type or another depends at the end on the kind of lock-in that is desired:
  • The Standards RIs locks the region, the instance type, and the OS. However, the highest discount rates are here.
  • The Convertible RIs locks the region, and the ability to use old instance generations (m1,c1,t1). Still, there is a certain flexibility in adjusting the monthly spent by playing with 1year to 3years term exchanges and ability to keep all your growth duration terms commitments in-sync.
  • The EC2 Saving plans also provide the highest discount rates, though the region and the monthly spent are locked.
  • Finally, the Compute Saving Plans locks the monthly spent, but they also cover the Fargate instances.

The good news is that it is possible to contract several savings instruments and they compliment each other.

Before moving to the next section, it is interesting to get to know the workload: try to understand the following:
  • Is the workload expected to be reduced in the next one or three years?
  • Is the architecture/technology of the applications expected to be changed? For example, from EC2 to Fargate or to EKS, or even to Serverless (lambda, Fargate)
  • Are there going to be legacy instances (m1,c1,t1)?
  • Are there existing cRIs or sRIs?
  • Is the workload distributed across regions?

So, what is the best strategy for the hybrid approach?

The one that allows maximizing the utilization during all the period while providing the best ROI. The ROI depends on the waste (overcommitment) or how easily the utilization approaches 100%, and the chosen saving instrument. To maximize utilization, it helps to count with a strong capacity plan or very good ability to forecast or predict the future of the workload. As both things are quite hard to achieve, it is wise to choose the better tools to cover existing demand.

Here are some tips on how to do it:
  • Start by covering those sticky old instances types with EC2 Savings Plans (best discount and, as these instances are hard to upgrade or remove, there are high chances they will remain there. Probably, in the end, they will be replaced in the same region). Just calculate the discounted price of these instances, and purchase an EC2 Saving Plan for them. Also, include your Fargate workload here.
  • Try to sell the SRIs providing a low ROI due to low utilization and replace them with Compute Plans in the same region. If the utilization is low, it’s probably due to an inconstant pattern. When these instances are stopped, the Compute Plan will be able to cover instances in non-principal regions.
  • Consider using EC2 Saving Plans for the capacity that will stay permanent for the chosen period of time (try to go with 3-years first). Reserve a part of these (like the 50%) to be covered with 1-year Convertible RIs that will help to protect in case of a workload drop. This will help to maximize the savings.
  • With already existing 3-years term Convertible RIs with less than two years pending, consider migrating or cover all your 1-year workload to 3-years terms (if you don’t know how to do it, feel free to ask us!). This will provide you better savings than using 1-year EC2 Saving Plans with similar period commitment. After this point, you should stop using CRI 1y./li>
  • All the leftovers, whatever is uncertain, try to cover it with Convertible RI 1-year. In the future, you’ll be able to reduce the monthly bill by a third by converting them into 3-years CRIs.

Using this approach, our customer Trilogy has been able to increase their utilization to 95%, with a coverage close to 90% getting 3-years term conditions while retaining the ability to reduce this coverage down to 69% at a days notice. It gets better, let’s discuss that live. Link to calendly.

One last tip: consider purchasing one t3.nano 3-years CRI every month or every quarter. In the future, it will help to the implementation of a 3-years term with a 1-year commitment at a very cheap price/low risk.

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