AWS Certified Cloud Practitioner (CLF-C02)Billing, Pricing, and SupportMedium
A startup's finance manager wants to pay a lower hourly rate for EC2 compute without any upfront payment and without committing to a specific instance family, in exchange for committing to a consistent dollar amount of usage per hour for one year. Which AWS pricing option best matches this requirement?
- AConvertible Reserved Instances
- BOn-Demand Instances
- CStandard Reserved Instances
- DCompute Savings Plans
Show answer & explanationAnswer & explanation
Correct answer: D. Compute Savings Plans
Compute Savings Plans offer discounted rates in exchange for a commitment to a consistent amount of usage (measured in $/hour) for a 1- or 3-year term, and they apply automatically across instance families, sizes, OS, and regions without requiring an upfront payment option.
Why the other options are wrong
- A. Convertible RIs allow instance family changes but still require selecting instance attributes and are less flexible than Savings Plans.
- B. On-Demand has no discount for commitment, contradicting the requirement.
- C. Standard RIs lock you into a specific instance family/region, less flexible than needed here.
Savings Plans
A pricing model offering lower rates in exchange for a commitment to a consistent amount of compute usage ($/hour) for 1 or 3 years.
- Two types: Compute Savings Plans (most flexible) and EC2 Instance Savings Plans (family-specific).
- Can save up to 72% compared to On-Demand.
- No upfront payment required, though upfront/partial upfront options exist for greater discounts.
Memory trick: Savings Plans = 'Spend Promise', not 'Instance Promise'.