Why Savings Plans Aren't Enough
Nov 2, 2020

Why Savings Plans Aren't Enough

In 2019 AWS launched Savings Plans as a way to save money on AWS resources without the hassle of managing Reserved Instances. And I for one welcome our new Savings Plan overlords. Savings Plans really are much easier to manage than Reserved Instances, and they do offer significant savings vs. On-Demand.

If you are feeling the burn of AWS costs and your only choices are On-Demand or Savings Plan, for sure, get the Savings Plan. But there is a catch.

The catch is the convenience of a Savings Plan isn’t free. You pay for it with lower savings compared to other reservation types.

To show you what I mean, let’s look at a specific example. Say you’re using t3, a common general-purpose instance type. If you buy a 1-year, no upfront, Compute Savings Plan (which many companies use because it’s the most flexible) you’ll save 29% vs. On-Demand.

In contrast, with a 1-year, no-upfront Reserved Instance, you’d get 38% savings vs. On-Demand. If you’re willing to max out your savings with a 3-year, all upfront RI, you’d save 62%.

Reserved Instances can generate substantially higher savings than Savings Plans, but a lot of organizations don’t take advantage of them because of the added work. In order to get the most out of Reserved Instances, you have to think about which instance types you use, how much you use them, how long you think you’ll keep using them, etc.

Who has time for that? You have to design features and fix bugs. Most organizations end up going with the Saving Plan to avoid the headache.

But what if you could have the best of both worlds - the ease of use of a Savings Plan, combined with the maxed out savings of targeted RIs? That’s what we want to give you at Archera.

Our automated platform matches your actual, historical AWS usage to the reservations with the highest savings opportunities. We then give you an optimized purchase plan with the appropriate mix of purchasing options. All you have to do is approve it to start getting the maximum savings. As an added bonus, we’ll continue to monitor your usage and make exchanges to keep your reservation portfolio optimized.

In contrast, AWS does not offer you the ability to save across all your services from a single pane of glass. For example, Savings Plans don’t cover database services like RDS, Redshift, ElastiCache, and Elasticsearch. In order to cover all the services you use manually, you’d need to go through various services, cost reports, and interfaces.

To show the savings impact in the real world, we did an analysis with five of our actual customers. We calculated how much could each customer could save under two scenarios:

  • Compute Savings Plans only
  • Reserved.ai optimal blend of reservations

Annual Savings Comparison

Where are the additional savings coming from?

  • Reservations for services that Savings Plans don’t cover, including database services like RDS, Redshift, ElastiCache, and Elasticsearch.
  • Targeted ultra-high savings RIs for instance types where we’ve detected consistent high usage.
  • Allocating upfront dollars where they make the biggest difference in terms of savings.

Why not have your cake and eat it too? Start a free trial with us today.

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