Reserved Instances, Savings Plans, and Spot — three pricing models with dramatically different trade-offs. The wrong choice can cost six figures over a one-year commitment.
The Decision Matrix
- 01Reserved Instances (RIs) — for stable, instance-specific workloads
Best when: you are committed to a specific instance family/region for 1-3 years. Trade-off: rigid; you pay for what you reserved even if traffic shifts.
- 02Savings Plans — for flexible commitment to compute spend
Best when: workloads are evolving (instance types may change). Compute Savings Plans cover EC2, Fargate, and Lambda.
- 03Spot Instances — for fault-tolerant, interruptible workloads
Best when: workload survives 2-minute interruption notice. 60-90% savings, but operational complexity.
The Quantitative Model We Use
def commitment_recommendation(monthly_baseline_usd, growth_rate, churn_risk):
"""
Returns: dict with recommended commitment percentages.
"""
# Conservative floor — never commit more than baseline minus stress test
safe_floor = monthly_baseline_usd * (1 - churn_risk - 0.1)
if growth_rate < 0.05: # stable
return {"savings_plan_pct": 0.85, "ri_pct": 0.0, "spot_pct": 0.10}
elif growth_rate < 0.20: # moderate
return {"savings_plan_pct": 0.65, "ri_pct": 0.0, "spot_pct": 0.15}
else: # high growth
return {"savings_plan_pct": 0.45, "ri_pct": 0.0, "spot_pct": 0.20}Ready to optimize your cloud or AI footprint?
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