AWS Savings Plans and Reserved Instances

This guide explains Savings Plans (SP) and Reserved Instances (RI), when to use each, and how FCAI helps automate coverage while preserving flexibility.

Summary

• Savings Plans cover compute usage (EC2, Fargate, Lambda) with a discounted hourly commitment.
• Reserved Instances apply to EC2 instance usage for specific families/regions and can be Convertible or Standard.
• FCAI analyzes utilization, volatility, and risk tolerance to recommend the right mix.

Choosing SP vs RI

• High variability: prefer Compute Savings Plans for broader coverage.
• Stable fleets: layer Standard RIs or EC2 Instance SPs for deeper discounts.
• Long‑lived databases/analytics: consider Standard RIs for predictable workloads.

Commitment terms

• 1‑year vs 3‑year: longer terms yield higher discounts.
• No Upfront, Partial, All Upfront: more upfront generally increases savings.

FCAI approach

1. Baseline: analyze 30–90 days of normalized usage.
2. Forecast: model seasonality and growth.
3. Coverage: target a safe coverage ratio with guardrails.
4. Execution: optional automated purchases with spend caps.
5. Monitoring: drift detection and renewal planning.

Best practices

• Start with conservative coverage, iterate monthly.
• Mix commitments (terms, payment options) to reduce risk.
• Avoid over‑committing before large migrations or deprecations.
• Reassess after major architecture changes (e.g., to Graviton, containers).

Visibility

• Track effective coverage and utilization in Cost Explorer and FCAI dashboards.
• Alert when commitment utilization drops or when coverage deviates from target.

For tailored recommendations, reach out to FCAI Support.