The difference between AWS Savings Plan and EDP (Enterprise Discount Program):
- Pricing Model: AWS Savings Plan offers discounted rates for specific usage commitment, while EDP provides broader discounts across AWS services based on overall spend commitment.
- Flexibility: The Savings Plan is more flexible, allowing changes in service usage, whereas EDP discounts are generally tied to overall spending levels.
- Commitment: A Savings Plan requires a commitment to a certain usage amount, while an EDP involves a financial commitment over a set period.
AWS EDP vs. Savings Plan
What is the AWS Savings Plan
AWS Savings Plan is a pricing model offered by Amazon Web Services (AWS) that allows customers to save money on their AWS compute usage.
This plan is characterized by:
- Usage Commitment: Customers commit to a specific amount of compute power usage (measured per hour) for either a one-year or three-year period.
- Flexible Services: This approach applies to various AWS services, including Amazon EC2, AWS Fargate, AWS Lambda, and Amazon SageMaker.
- Cost Savings: Offers up to 72% savings compared to On-Demand rates.
- Variety of Plans: Includes Compute Savings Plans, EC2 Instance Savings Plans, and Amazon SageMaker Savings Plans.
- Payment Options: Customers can choose from all upfront, partial upfront, or no upfront payment options.
What is AWS EDP
AWS Enterprise Discount Program (EDP) is a discount program for large-scale AWS customers. It involves:
- Financial Commitment: Customers commit to spending a specific dollar amount over a fixed period, typically one to three years.
- Broad Discounts: Provides discounts across a wide range of AWS services, not limited to compute services.
- Custom Agreement: The terms and discounts are negotiated based on the customer’s projected AWS usage.
- Enterprise-Focused: Tailored for large organizations with substantial AWS spend.
Pros and Cons of the AWS Savings Plan
Pros
- Significant Cost Savings:
AWS Savings Plans offer substantial discounts compared to On-Demand pricing, with potential savings of up to 72% for consistent workloads. - Flexibility Across Services:
Unlike Reserved Instances, Savings Plans allow customers to shift usage across AWS services such as EC2, Lambda, and Fargate, providing versatility for changing needs. - Multiple Payment Options:
Customers can choose from three payment options: no upfront, partial upfront, or full upfront, tailoring payments to their financial strategies and cash flow requirements.
Cons
- Commitment Period:
Savings Plans require customers to commit to a fixed hourly usage rate for one or three years, which can be limiting for businesses with fluctuating or unpredictable workloads. - Complexity in Management:
Ensuring workloads align with the committed hourly rate and optimizing plan usage can be challenging, particularly for organizations managing multiple workloads. - Limited to Compute Services:
Savings Plans are primarily designed for compute-related services and may not offer the same cost advantages for other AWS services, such as storage or databases.
Pros and Cons of AWS EDP
Pros
- Broad Service Coverage:
Discounts under AWS EDP apply to a wide range of AWS services, making it a versatile option for organizations running diverse workloads across multiple AWS offerings. - Customizable Agreements:
AWS EDP terms are tailored to the customer’s needs, allowing organizations to negotiate discounts and commitments that align with their strategic objectives and growth plans. - Ideal for Large-Scale Operations:
EDP is designed for large enterprises that use AWS extensively. It provides significant cost benefits and dedicated account management support.
Cons
- High Minimum Spend Requirement:
AWS EDP requires organizations to commit to a significant annual spending level, which may be prohibitive for smaller businesses or those with unpredictable growth. - Reduced Flexibility:
While discounts are broad, they are tied to overall committed spending rather than offering the granular service-specific flexibility Savings Plans provide. - Complex Negotiation and Forecasting:
Establishing an EDP agreement requires careful negotiation. Businesses must accurately forecast AWS usage to avoid overcommitting or underutilizing the agreement.
Comparison of AWS Savings Plans and AWS EDP
Each agreement offers distinct advantages and suits different organizational needs:
| Feature | AWS Savings Plan | AWS EDP |
|---|---|---|
| Cost Savings | Substantial for compute services | Broad discounts across most AWS services |
| Service Flexibility | Flexible across compute services | Discounts tied to overall spending |
| Commitment Period | 1 or 3 years | 1 to 5 years |
| Minimum Spend | Low | High |
| Best For | Small to medium businesses with predictable compute needs | Large enterprises with diverse, high-volume AWS usage |
| Complexity | Easier to manage | Requires negotiation and accurate forecasting |
AWS Savings Plans are better suited for organizations with specific computing needs and moderate budgets. At the same time, AWS EDP is ideal for enterprises with large-scale, long-term cloud operations seeking broad cost savings across services. Both programs require thoughtful planning to maximize benefits and align with organizational goals.
FAQ: AWS EDP vs. Savings Plan
What is AWS EDP?
AWS EDP (Enterprise Discount Program) is a long-term agreement in which organizations commit to a specific AWS spending level over 1 to 5 years in exchange for broad discounts on AWS services.
What is the AWS Savings Plan?
AWS Savings Plans are flexible pricing models offering significant discounts on AWS compute services in exchange for a commitment to a consistent hourly usage rate over 1 or 3 years.
Who benefits most from AWS EDP?
Large enterprises with diverse workloads and high annual AWS spending are ideal candidates for AWS EDP due to its broad service coverage and significant discounts.
Who should consider AWS Savings Plans?
Savings plans benefit organizations with predictable compute needs, such as consistent EC2 or Lambda usage, due to their lower entry point and flexibility.
How do the discounts differ?
AWS EDP discounts apply to a wide range of AWS services based on committed spend, while Savings Plan discounts are specific to compute services like EC2, Lambda, and Fargate.
Which offers greater flexibility in usage?
Savings Plans provide more flexibility within compute services, allowing usage across instance types, sizes, and regions. EDP discounts are broader but tied to overall spending commitments.
What are the commitment terms for each?
AWS EDP typically requires a multi-year spending commitment, usually 1 to 5 years. Savings Plans require an hourly usage rate for 1 or 3 years.
Can I combine AWS EDP and Savings Plans?
Yes, organizations can use both programs together. EDP discounts apply to overall spending, while Savings Plans provide additional savings for compute-specific workloads.
What happens if I underuse the commitment?
For AWS EDP, organizations must meet the committed spend, regardless of actual usage. In Savings Plans, unused hourly commitments are not refunded.
Which program is better for growing businesses?
Savings Plans are more suited for small to medium businesses with growing but predictable compute usage. EDP is better for enterprises with established large-scale operations.
Are there payment options for each?
Savings Plans offer flexible payment options, including no, partial, and full upfront. EDP agreements are customized but typically require a significant financial commitment.
How is the negotiation process different?
AWS EDP requires negotiation with AWS representatives to tailor the agreement, while Savings Plans are self-service and do not require formal negotiations.
Can I change the terms mid-agreement?
AWS EDP agreements are less flexible, with limited scope for amendments. Savings Plans also have fixed terms but allow flexibility within committed usage.
Which is easier to manage?
Savings Plans are simpler to manage, focusing on optimizing compute usage. EDP requires more effort in forecasting, negotiation, and tracking spending.
How do I decide between AWS EDP and Savings Plans?
Consider your organization’s size, budget, workload diversity, and growth projections. EDP is ideal for high spending across multiple services, while Savings Plans work best for predictable compute usage.
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s to make an informed decision that aligns with their cloud strategy and financial objectives.
