AWS commitment discounts come in two families. Reserved Instances and Savings Plans. Both predate the Enterprise Discount Program. Both stack with EDP. The right mix is workload specific.
The wrong commitment is expensive. A three year all upfront RI on the wrong instance family locks the customer into a depreciation schedule with no exit.
This article gives the buyer side framework. Pair it with the AWS hub, the EDP discount benchmarks, the AWS contract negotiation, and the commitment calculator.
Key Takeaways
What a CIO needs to know in 90 seconds
- Two families. Reserved Instances on EC2 and RDS. Savings Plans on Compute, EC2 Instance, and SageMaker.
- Maximum discount. Up to 72 percent for three year all upfront.
- RI is instance specific. Tied to family, region, OS, tenancy.
- Compute Savings Plan is flexible. Covers EC2, Fargate, and Lambda across regions and families.
- EC2 Instance Savings Plan is family bound. Cheaper than Compute SP but family specific.
- SageMaker Savings Plan covers AI workloads. Separate plan family.
- EDP discount stacks. EDP applies on top of RI and SP discounts.
Reserved Instances in 2026
Reserved Instances are the older commitment vehicle. They cover EC2 instances in a specific region, family, OS, and tenancy. RIs come in Standard and Convertible flavors with payment options.
Standard versus Convertible
| Dimension | Standard RI | Convertible RI |
|---|
| Maximum discount | Up to 72 percent | Up to 66 percent |
| Instance flexibility | Locked to family | Can swap to different family |
| Term | 1 or 3 year | 1 or 3 year |
| Payment options | All upfront, partial upfront, no upfront | Same three options |
| Resale on RI Marketplace | Yes | No |
| Best for | Stable steady state workloads | Workloads with future family change |
RI is not dead
Savings Plans are the newer vehicle but RIs still apply on RDS, ElastiCache, OpenSearch, Redshift, and DynamoDB. Some workloads have no Savings Plan equivalent. The buyer side audit identifies which workloads are RI only and which have SP options.
Savings Plans in 2026
Savings Plans launched in 2019 as the more flexible commitment vehicle. They commit to a dollar per hour spend rather than a specific instance. Three plan families exist.
Three Savings Plan families
- Compute Savings Plan. Covers EC2, Fargate, Lambda across all regions and families. Maximum 66 percent off list.
- EC2 Instance Savings Plan. Covers EC2 in a specific region and family. Maximum 72 percent off list.
- SageMaker Savings Plan. Covers SageMaker training, processing, hosting. Maximum 64 percent off list.
Payment options
Each Savings Plan family supports All Upfront, Partial Upfront, and No Upfront payment options. The discount band shifts roughly 5 percentage points across the three options.
RI versus SP. Five differences
The two families look similar at the high level but differ on five practical dimensions.
Five practical differences
| Dimension | Reserved Instances | Savings Plans |
|---|
| Commitment unit | Instance hour | Dollar per hour |
| Service coverage | EC2, RDS, ElastiCache, others | EC2, Fargate, Lambda, SageMaker |
| Region flexibility | Standard locked, Convertible swappable | Compute SP region flexible |
| Family flexibility | Standard locked, Convertible swappable | Compute SP family flexible |
| Resale option | Standard RI on Marketplace | None |
Coverage strategy by workload
The right commitment vehicle depends on workload behavior. Three workload archetypes drive the decision.
Three archetypes
- Predictable steady state EC2 or Fargate. EC2 Instance Savings Plan if family is stable. Compute Savings Plan if family is variable.
- Variable burst with stable baseline. Cover the baseline with Compute Savings Plan. Run the burst on On Demand.
- RDS or ElastiCache or OpenSearch. Reserved Instances. Savings Plans do not cover these services.
The 70 percent coverage rule
The general buyer side rule is to cover roughly 70 percent of steady state with commitment vehicles and run the remaining 30 percent on On Demand. The 70 percent target balances the discount upside against the commitment risk on workload change.
Cost worked across two scenarios
The two scenarios below walk the math on a typical workload mix.
Steady state EC2
500 m6i.xlarge in us east 1 running 24x7. On Demand list 0.192 per hour times 8,760 hours times 500 instances equals 840,960 per year. Three year all upfront EC2 Instance SP at roughly 65 percent off equals 294,336 per year. Annual savings 546,624.
Mixed workload
1,000 EC2 instances baseline plus 400 burst plus 200 Fargate tasks. Compute Savings Plan covering baseline at 60 percent off equals roughly 580,000 per year on a 1.45 million baseline. The remaining burst and Fargate run on On Demand at roughly 360,000 per year. Total cost 940,000 per year against an On Demand only baseline of 1.81 million.
Pitfalls and the buyer side controls
The commitment vehicles have predictable failure modes. Each pitfall has a buyer side control.
Six pitfalls and controls
| Pitfall | Buyer side control |
|---|
| Standard RI on a family that gets retired | Use Convertible RI for older families, switch on retirement |
| Compute Savings Plan over committed | Cap commitment at 70 percent of steady state |
| Three year all upfront on volatile workload | Use one year no upfront on volatile workloads |
| SageMaker Savings Plan on experimental workload | Run experimental on On Demand, commit only after stabilization |
| EDP applied below RI and SP | EDP stacks on top, verify the math on the bill |
| RI Marketplace resale at deep loss | Identify excess RIs at month three, list early on Marketplace |
What to do next
The eight step checklist below runs the buyer side process. The work fits inside a 90 day commitment planning window.
- Pull the Cost Explorer data. Twelve months of EC2, Fargate, Lambda, RDS, ElastiCache, OpenSearch usage.
- Identify steady state. Workloads that run greater than 80 percent utilization across the term.
- Map workload to commitment vehicle. EC2 Instance SP, Compute SP, RI by service.
- Cap the commitment. 70 percent of steady state as the default commitment band.
- Choose payment option. All upfront for stable workloads, partial or no upfront for volatile.
- Stack with EDP. Verify the EDP applies on top of the commitment discount.
- Lock the term. Three year for stable, one year for volatile.
- Monitor monthly. Track utilization at the commitment level for early adjustment.
Frequently asked questions
What is the maximum discount on AWS Reserved Instances?
Up to 72 percent for Standard Reserved Instances on three year all upfront payment. Convertible RIs reach 66 percent on the same payment option. The actual discount depends on the instance family, region, OS, and tenancy. The discount table is published by AWS and updated periodically.
What is the difference between RI and Savings Plans?
RIs commit to a specific instance configuration. Savings Plans commit to a dollar per hour spend across a family or all of compute. RIs cover EC2, RDS, ElastiCache, OpenSearch, Redshift, DynamoDB. Savings Plans cover EC2, Fargate, Lambda, and SageMaker. RIs offer a Marketplace resale option. Savings Plans do not.
Should we choose Compute SP or EC2 Instance SP?
EC2 Instance SP is cheaper but locks to a family and region. Compute SP is more flexible across families and regions but offers a lower discount. The right choice depends on workload predictability. Stable single family workloads suit EC2 Instance SP. Multi family or migration workloads suit Compute SP.
How much commitment coverage should we target?
Roughly 70 percent of steady state. The 70 percent target balances the discount upside against the commitment risk on workload change. The remaining 30 percent runs on On Demand to absorb burst and to cover workload churn. Some mature programs push to 80 percent on the most stable workloads.
Does EDP stack on top of RIs and Savings Plans?
Yes. The EDP discount applies on top of the commitment vehicle discount. The math runs Commitment first, EDP on the post commitment number. Verify the math on the AWS bill in the first month after EDP execution. The EDP percentage on the line items reflects the stacked discount.
Can we sell unused Reserved Instances?
Standard RIs can be listed on the AWS Reserved Instance Marketplace. Convertible RIs cannot be sold. The Marketplace resale typically lands 30 to 60 percent of the remaining commitment value depending on instance family demand. The earlier the listing the higher the recovery.
How Redress engages on AWS commitment
Redress runs the AWS commitment audit, the workload archetype mapping, and the EDP stacking verification on the buyer side. The deliverable is a defended commitment portfolio, a defended coverage band, and a defended EDP envelope across the term.
Read the related Vendor Shield, the Renewal Program, the Benchmark Program, the Software Spend Assessment, the Benchmarking framework, the about us page, the management team page, the locations page, and the contact page.
