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Amazon Web Services (AWS) is an Amazon subsidiary offering cloud computing web services to its users. To make these more broadly accessible, AWS customers can use one of two available billing discount models to save on on-demand usage costs if they commit on a long-term basis. These are AWS Reserved Instances (RI) and AWS Savings Plan.

While the general idea of these two schemes may seem largely similar, they have some important differences. We will go through each of them in a series of articles that will focus on the best use cases, differences, advantages, and limitations of both models and help you decide on the most suitable choice to meet your needs.

Who Are These Models Intended For?

Back in 2009, AWS launched Reserved Instances which have since gone through many versions and revisions, incorporating feedback from their users. These users have broadly accepted AWS Reserved Instance as a way to cut their cloud expenditures. AWS Savings Plan was introduced in 2019 as an alternative flexible pricing model in exchange for a commitment to consistent AWS compute usage.

Businesses have since learned that these two models can be applied almost interchangeably, which points to their superficial similarity and the lack of focus on the part of Amazon to make the models clearly distinguishable. 

For starters, both of them offer benefits to those who can commit to long-term usage or who decide to pay upfront. The discounts thus apply to the resources used for computing or databases, such as AWS Fargate, Amazon RDS, Amazon ElastiCache, Amazon EC2, AWS Lambda, or Amazon Redshift.

In the next article, we are going to see how these two models differ in terms of their discount structures.