Compute vs EC2 Instance Savings Plans: What Is the Difference?

Amazon Web Services offers both Compute Savings Plans and EC2 Instance Savings Plans to help organizations reduce their cloud computing bills in exchange for a one-year or three-year hourly spend commitment. The primary difference between the two pricing models comes down to flexibility versus discount depth. Compute Savings Plans offer maximum flexibility by automatically applying discounts across Amazon EC2, AWS Fargate, and AWS Lambda regardless of instance family, size, operating system, or AWS Region, while offering discounts of up to 66 percent. In contrast, EC2 Instance Savings Plans provide deeper discounts of up to 72 percent off On-Demand rates, but require you to commit to a specific EC2 instance family within a chosen AWS Region.

How AWS Savings Plans Work

Savings Plans are a flexible pricing model that provides lower prices compared to On-Demand usage in exchange for a commitment to a consistent amount of compute usage, measured in dollars per hour, for a 1-year or 3-year term. When you sign up for a Savings Plan, AWS charges you your committed hourly rate whether you use the compute capacity or not. Any usage up to your commitment is billed at the discounted Savings Plan rate, and any usage beyond your commitment is billed at standard On-Demand rates.

If we let \(C\) represent your hourly commitment in dollars, \(U\) represent your eligible compute usage discounted at the Savings Plan rate, and \(O\) represent any excess On-Demand usage, your total hourly compute cost \(T\) can be expressed as:

\[T = C + O\]

Both plan types offer three payment options that affect the final discount percentage:

• No Upfront: Requires no initial payment, and you are billed monthly based on your hourly commitment.
• Partial Upfront: Requires paying at least half of the commitment upfront, with the remainder billed monthly, yielding a slightly better discount than No Upfront.
• All Upfront: Requires paying the entire 1-year or 3-year commitment in a single initial payment, providing the highest possible discount.

What Is a Compute Savings Plan?

Compute Savings Plans provide the highest level of flexibility across AWS compute services and offer discounts of up to 66% compared to On-Demand prices. These plans automatically apply to your compute usage across multiple services and configurations without requiring manual intervention when your architecture changes.

With a Compute Savings Plan, you can freely change:

• Compute Service: Shift workloads between Amazon EC2, AWS Fargate (for Amazon ECS and Amazon EKS), and AWS Lambda.
• AWS Region: Move workloads from one region to another (for example, migrating from us-east-1 to eu-west-1).
• Instance Family: Switch between instance families such as moving from general-purpose m6i instances to compute-optimized c7g instances.
• Instance Size: Scale up or down between sizes (such as large, xlarge, or 2xlarge).
• Operating System: Change between Linux, Windows, RHEL, or SUSE.
• Tenancy: Move between Shared (default), Dedicated Instances, and Dedicated Hosts.

Because of this broad applicability, Compute Savings Plans are ideal for dynamic environments, multi-region architectures, and organizations modernizing their applications by migrating from EC2 virtual machines to serverless containers on Fargate or functions on Lambda.

What Is an EC2 Instance Savings Plan?

EC2 Instance Savings Plans provide the lowest prices within the Savings Plans model, offering discounts of up to 72% compared to On-Demand rates. In exchange for this deeper discount, you commit to usage of individual instance families within a specific AWS Region (for example, committing to m7i usage in us-west-2).

While you are locked into a specific region and instance family for the duration of the 1-year or 3-year term, EC2 Instance Savings Plans still provide flexibility within that boundary:

• Instance Size: Your discount automatically applies across any instance size within the committed family (for example, moving from c6i.xlarge to c6i.4xlarge).
• Operating System: You can switch between supported operating systems (such as switching from Windows to Linux) within the same instance family and continue receiving the discounted rate.
• Tenancy: You can change between Shared and Dedicated tenancy within that family and region.

Notice that EC2 Instance Savings Plans only apply to Amazon EC2 usage; they do not cover AWS Fargate or AWS Lambda workloads.

Side-by-Side Comparison

When to Choose Each Plan

Choose a Compute Savings Plan When:

• You plan to migrate workloads from EC2 instances to AWS Fargate or AWS Lambda during the commitment term.
• You frequently adopt new EC2 instance generations (such as upgrading from m5 to m6i or m7g) to take advantage of better price-performance ratios.
• Your architecture spans multiple AWS Regions or you anticipate shifting traffic between regions.
• You want a straightforward baseline commitment that covers your organization's global compute spend without worrying about stranded capacity in a single instance family.

Choose an EC2 Instance Savings Plan When:

• You have steady-state, predictable EC2 workloads that will remain on a specific instance family and region for 1 to 3 years.
• Maximizing cost savings (reaching up to 72% discount) is a higher priority than architectural mobility.
• You need the ability to change instance sizes or operating systems within a known instance family without having to manually modify or exchange reservations.

Combining Both Plans in a Hybrid Strategy

You do not have to choose exclusively between the two plans. Many organizations combine both models to optimize cost and flexibility. A common strategy is to purchase EC2 Instance Savings Plans to cover stable, predictable baseline workloads locked to specific instance families (such as long-running database hosts or core application clusters), and then layer a Compute Savings Plan on top to cover variable EC2 workloads, multi-region deployments, and serverless usage across Fargate and Lambda. When both plans are active in an account, AWS automatically applies the EC2 Instance Savings Plan first to eligible usage before applying the broader Compute Savings Plan to maximize your overall savings.