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Comparing Reserved Instances and Savings Plans: How to Choose

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In the fifth article comparing the AWS Reserved Instances and AWS Savings Plan models, we will consider how to choose between the two.  

Compute Savings Plan seemingly presents itself as the most desirable all-rounder option if you are after savings. Yet is this truly the case?

For starters, bear in mind that each individual pricing model is intended for AWS resources that are not included with the remaining models, with the exception of EC2. For example, AWS Lambda or Fargate will not be covered by Reserved Instances, while Redshift, RDS, or ElastiCache are not provided for under the Savings Plans.

Next, you should also consider the exit terms offered by the pricing contract. You are not obliged to observe contract terms of Standard Reserved Instances, for example, if they are not in line with your immediate business plans. Now, we have established that Standard Reserved Instances are generally more restrictive, but you have an option to both purchase and sell an RI in the AWS Reserved Instance Marketplace. If you succeed in selling it, you can recover some of the value that you originally invested. Also, it is important to know that Savings Plans do not work in this way and can be neither purchased nor sold in the marketplace.

Some of the costs related to seasonal usage spikes can be moderated by opting for shorter terms with reserved instances. This is particularly useful if you know that Standard RIs can be acquired with terms as short as one month, i.e., without those multi-year (1 or 3 years) lock-in terms.