Reserved Instances and Savings Plans in AWS - Commands & Configuration

Introduction

Reserved Instances and Savings Plans help you save money on cloud computing by committing to use certain resources for a longer time. They reduce costs compared to paying for resources only when you use them.

When you know your application will run continuously for months or years and want to pay less.

When you want to plan your cloud budget with predictable costs.

When you want to save money on virtual machines or databases you use regularly.

When you want to avoid surprises from fluctuating hourly prices.

When you want to optimize costs for steady workloads in your cloud environment.

Commands

This command lists all your active Reserved Instances so you can see what you have reserved and how it is being used.

Terminal

aws ec2 describe-reserved-instances --filters Name=state,Values=active

Expected Output

ReservedInstances:

- ReservedInstancesId: abc12345-6789-0abc-def1-234567890abc

  InstanceType: t3.medium

  State: active

  Start: 2023-01-01T00:00:00Z

  End: 2024-01-01T00:00:00Z

  InstanceCount: 2

  Scope: Availability Zone

  ProductDescription: Linux/UNIX

→

--filters - Filter results to show only active Reserved Instances

This command shows your active Savings Plans, which are flexible pricing plans that apply to your usage and save money.

Terminal

aws savingsplans describe-savings-plans --state ACTIVE

Expected Output

SavingsPlans:

- SavingsPlanId: sp-0123456789abcdef0

  SavingsPlanType: Compute

  State: ACTIVE

  Start: 2023-02-01T00:00:00Z

  End: 2025-02-01T00:00:00Z

  Commitment: 10.0

  Currency: USD

→

--state - Show only Savings Plans that are currently active

This command buys a Reserved Instance offering to save money on a specific instance type for a set period.

Terminal

aws ec2 purchase-reserved-instances-offering --reserved-instances-offering-id 12345678-90ab-cdef-1234-567890abcdef --instance-count 1

Expected Output

ReservedInstancesId: abc12345-6789-0abc-def1-234567890abc

→

--reserved-instances-offering-id - Specifies the ID of the Reserved Instance offering to purchase

→

--instance-count - Number of Reserved Instances to purchase

This command purchases a Savings Plan with a 3-year term and full upfront payment to maximize savings.

Terminal

aws savingsplans create-savings-plan --savings-plan-offering-id sp-offering-12345678 --commitment 10 --term 3 --payment-option ALL_UPFRONT

Expected Output

SavingsPlanId: sp-0123456789abcdef0

→

--savings-plan-offering-id - ID of the Savings Plan offering to purchase

→

--commitment - Hourly commitment amount in USD

→

--term - Length of the Savings Plan in years

→

--payment-option - Payment method for the Savings Plan

Key Concept

If you remember nothing else from this pattern, remember: committing to use cloud resources for a longer time saves you money compared to paying as you go.

Common Mistakes

Buying Reserved Instances without matching the instance type or region of your actual usage.

You won't get the cost savings if your usage doesn't match the Reserved Instance specifications.

Check your current usage patterns and buy Reserved Instances that match your instance types and regions.

Confusing Savings Plans with Reserved Instances and buying both without understanding differences.

You might pay for overlapping commitments and not optimize savings.

Understand that Savings Plans are more flexible and cover multiple instance types, while Reserved Instances are specific; choose based on your needs.

Not checking the state of Reserved Instances or Savings Plans before buying new ones.

You might buy unnecessary or duplicate commitments, wasting money.

Always list your active Reserved Instances and Savings Plans to avoid overlap.

Summary

Use 'aws ec2 describe-reserved-instances' to see your active Reserved Instances.

Use 'aws savingsplans describe-savings-plans' to check your active Savings Plans.

Purchase Reserved Instances or Savings Plans with specific commands to save money on long-term usage.

Practice

1. What is the main benefit of using AWS Reserved Instances or Savings Plans?

easy

A. They provide free support from AWS

B. They increase the speed of your instances

C. They reduce cloud costs by committing to usage over time

D. They automatically scale your instances

Solution

1. Step 1: Understand the purpose of Reserved Instances and Savings Plans

   Both are pricing models that offer discounts in exchange for a commitment to use AWS resources for a period.

2. Step 2: Identify the main benefit

   The main benefit is cost savings by committing to usage, not performance or support features.

3. Final Answer:

   They reduce cloud costs by committing to usage over time -> Option C

4. Quick Check:

   Cost savings = C [OK]

Hint: Focus on cost savings through commitment [OK]

Common Mistakes:

• Thinking Reserved Instances improve instance speed
• Confusing cost savings with free support
• Assuming automatic scaling is included

2. Which of the following is the correct way to describe a Savings Plan in AWS?

easy

A. A flexible pricing model that applies to compute usage regardless of instance type

B. A commitment to use a specific instance type in a specific region

C. A one-time payment for on-demand instances

D. A free trial period for new AWS users

Solution

1. Step 1: Recall Savings Plan characteristics

   Savings Plans offer flexible discounts that apply to compute usage regardless of instance type or region.

2. Step 2: Match the correct description

   A flexible pricing model that applies to compute usage regardless of instance type correctly describes Savings Plans as flexible pricing models, unlike Reserved Instances which are specific.

3. Final Answer:

   A flexible pricing model that applies to compute usage regardless of instance type -> Option A

4. Quick Check:

   Savings Plans = Flexible pricing = A [OK]

Hint: Savings Plans are flexible, not tied to instance type [OK]

Common Mistakes:

• Confusing Savings Plans with Reserved Instances
• Thinking Savings Plans are one-time payments
• Assuming Savings Plans are free trials

3. Given the following scenario: You purchase a 1-year Standard Reserved Instance for an m5.large instance in us-east-1. Later, you launch an m5.xlarge instance in the same region. How does the Reserved Instance discount apply?

medium

A. The discount applies partially, covering the m5.large portion of the m5.xlarge

B. The discount applies to any instance type in any region

C. The discount does not apply to the m5.xlarge instance

D. The discount applies fully to the m5.xlarge instance

Solution

1. Step 1: Understand Reserved Instance scope

   Standard Reserved Instances apply to specific instance types and regions. m5.large is different from m5.xlarge.

2. Step 2: Check discount application

   The discount partially applies because m5.xlarge is double the size of m5.large; the RI covers the equivalent of one m5.large unit.

3. Final Answer:

   The discount applies partially, covering the m5.large portion of the m5.xlarge -> Option A

4. Quick Check:

   RI discount partial for larger instance = D [OK]

Hint: RI discounts apply by instance size equivalence [OK]

Common Mistakes:

• Assuming full discount on different instance sizes
• Thinking discount applies across regions
• Believing discount applies to any instance type

4. You configured a Savings Plan but notice your billing does not reflect the expected discount. Which of the following is the most likely cause?

medium

A. You purchased a Reserved Instance instead of a Savings Plan

B. You purchased a Compute Savings Plan but launched instances outside supported services

C. You did not enable multi-region support in your Savings Plan

D. You launched instances only in the free tier

Solution

1. Step 1: Understand Savings Plan coverage

   Compute Savings Plans apply discounts to supported compute services like EC2, Fargate, and Lambda.

2. Step 2: Identify billing mismatch cause

   If instances run on unsupported services or outside the plan scope, discounts won't apply, causing billing to be higher than expected.

3. Final Answer:

   You purchased a Compute Savings Plan but launched instances outside supported services -> Option B

4. Quick Check:

   Discounts apply only to supported services = A [OK]

Hint: Check if instances use supported services for Savings Plans [OK]

Common Mistakes:

• Confusing Reserved Instances with Savings Plans
• Assuming multi-region must be enabled always
• Ignoring service eligibility for discounts

5. Your company has a steady workload running 10 m5.large instances in us-west-2 for 24/7 use. You want to minimize costs while keeping flexibility to change instance types later. Which option is best?

hard

A. Purchase 1-year Standard Reserved Instances for 10 m5.large instances

B. Use On-Demand instances only to keep flexibility

C. Purchase 3-year Convertible Reserved Instances for 10 m5.large instances

D. Purchase a 1-year Compute Savings Plan covering the equivalent usage

Solution

1. Step 1: Analyze workload and flexibility needs

   The workload is steady and predictable, so committing to usage saves money. Flexibility to change instance types is important.

2. Step 2: Compare options

   Standard RIs are less flexible; Convertible RIs allow changes but require longer commitment. Compute Savings Plans offer flexibility across instance types and families with 1-year commitment.

3. Step 3: Choose best option

   Compute Savings Plan balances cost savings and flexibility best for this scenario.

4. Final Answer:

   Purchase a 1-year Compute Savings Plan covering the equivalent usage -> Option D

5. Quick Check:

   Flexibility + cost savings = Compute Savings Plan = B [OK]

Hint: Choose Savings Plans for flexibility with steady workloads [OK]

Common Mistakes:

• Choosing Standard RIs despite flexibility needs
• Ignoring commitment length impact
• Assuming On-Demand is cheapest for steady workloads