We all love discounts. But do you know what you’re getting yourself into?
AWS Compute Savings Plans (CSP) is a hourly commitment in exchange for discounted instance price. The purpose of this post is not to cover all other cost reduction tools such as Instance Savings Plans or Reserved Instances. I just want to point out a couple of pitfalls so you can make an educated decision.
Conceptually, CSP is what you commit to spend on a hourly basis. For demonstration purpose, let’s say you have 10 m6i.large Linux instances in Ohio region. They run 7×24 non-stop. The on-demand price will be $0.096, making a total of $0.96 for the 10 instances
How much to commit to?
Now suppose you want to purchase CSP to cover all instances, how much should you commit to? It’s not $0.96. CSP commitment is based on savings plans rate. In this case $0.07053. You should commit to $0.7053.
CSP is counted hourly
Now suppose your workload does not run at 7×24. No one uses the application at night, and you stop your instances 8 hours a day. How does that affect your CSP? Well, for those 8 hours, the commitment will become unused savings plans. Fancy name. What it means is that the commitment does not roll over to next hour. For those 8 hours, you will still be billed at $0.7053/hour as you have committed, even if the instances are stopped or terminated.
Should I cover 100% of my workload with CSP?
For most business, that’s not a good idea. 70-80% is more sensible. Over time, you may decommission workloads. You may also replace on-demand instances with spot instances. Or you may need to stop instances during an upgrade or recovery. There are other scenario where you just don’t need that many instances – even if you think you do at the beginning of the commitment period.
Can I change my mind later?
You can top-up your CSP any time. But no cancellation or exchange is allowed. Once you’re committed, you’re committed for the full term.
Bottomline
CSP, or any other commitments, should not be taken lightly. You’re buying from for-profit organizations and their primary drive is to make money – from you.
