EC2 Reserved Instances and Savings Plans

Compare EC2 pricing models and build a cost optimization decision matrix.

Introduction

30 Second Summary

Running servers in the cloud is like paying for electricity. You could pay full price every month, or you could lock in a discounted rate by committing to a longer contract.

In this project, you will explore AWS cost optimization tools to compare Reserved Instances and Savings Plans pricing models. You will build a decision matrix that maps each pricing model to its ideal use case, directly preparing you for SAA-C03 Domain 4 exam questions.

What You'll Build

A comprehensive cost optimization analysis using the AWS Pricing Calculator, the RI purchase wizard, and the Savings Plans recommendation engine in the AWS Billing and Cost Management Console.

By the end of this project, you'll have:

  • A completed AWS Pricing Calculator estimate comparing On-Demand, Reserved Instance, and Savings Plans costs for a realistic workload.
  • Hands-on experience navigating the RI purchase wizard and Savings Plans purchase flow in the AWS Console.
  • A personal decision matrix mapping every EC2 pricing model to its optimal use case, discount level, and exam traps.
  • Secret Mission: a Capacity + Discount combination strategy document showing how to pair On-Demand Capacity Reservations with Savings Plans or Regional RIs for guaranteed capacity AND discounted pricing.

Are there any prerequisites?

This is Project 2 in a two-part series on EC2 pricing models. Project 1 covered Spot Instances, Spot Fleet, and Capacity Reservations hands-on.

You need an active AWS account and a basic understanding of EC2 instance types. This project is exploration-only and costs $0. You will not purchase any Reserved Instances or Savings Plans.

Before We Start

Before We Start...

Explore the Reserved Instance Purchase Wizard

When you run EC2 instances 24/7, On-Demand pricing adds up fast. AWS offers commitment-based discounts of up to 72% if you agree to use a specific instance configuration for 1 or 3 years.

These commitments are called Reserved Instances. In this step, you will walk through the RI purchase wizard in the AWS Console to understand the configuration options that appear on the SAA-C03 exam. You will not make any actual purchases.

In this step, get ready to:
  • Explore the RI purchase wizard and compare Standard vs Convertible offering classes.
  • Observe how Regional vs Zonal scope affects capacity reservation and size flexibility.
  • Visit the RI Marketplace and note which RI types can be resold.
Navigate to the RI purchase wizard

Reserved Instances are not physical servers. They are billing discounts that automatically apply to matching running On-Demand instances. The purchase wizard is where you configure exactly what usage pattern you want to commit to.

  • Open your browser and go to the AWS Management Console at https://console.aws.amazon.com/.
  • Sign in with your AWS account credentials.
  • In the search bar at the top of the console, type EC2 and select EC2 from the results.
  • In the left navigation pane, scroll down to the Instances section.
  • Click Reserved Instances.
  • Click Purchase Reserved Instances.

You should now see the RI purchase configuration form with fields for Platform, Tenancy, Offering Class, and Term.

  • Set Platform to Linux/UNIX.
  • Set Tenancy to Default.
  • Set Offering Class to Standard.
  • Set Term to 1-year.
  • Click Search to view available offerings and their pricing.

The results table shows pricing for each instance type with columns for the three payment options: All Upfront, Partial Upfront, and No Upfront.

  • Note the pricing displayed for a few instance types (e.g. m5.xlarge).
  • Now change Offering Class to Convertible and click Search again.
  • Compare the pricing for the same instance type. Convertible RIs cost slightly more because they offer up to 66% discount vs Standard's up to 72%.
  • Change Term to 3-year and click Search to see how a longer commitment further reduces the price.

What is Standard vs Convertible?

A Standard RI locks you into a specific instance type for the full term. You can only modify its Availability Zone, size (within the same family), and networking type. You cannot exchange it for a different instance family or OS.

A Convertible RI lets you exchange it for another Convertible RI with entirely different attributes (instance family, OS, tenancy, scope). The tradeoff is a smaller maximum discount: 66% instead of 72%.

How do payment options affect the discount?

More money upfront means a larger discount. All Upfront gives the biggest savings. Partial Upfront splits the cost between an upfront charge and a reduced monthly rate. No Upfront has no upfront cost but the smallest discount of the three.

Do NOT click Purchase

This is exploration only. If you select an offering and see a purchase confirmation button, do not proceed. RI purchases are binding commitments that cannot be canceled.

Compare Regional vs Zonal scope

Every RI has a scope that determines whether its discount and capacity reservation apply across an entire region or only within one specific Availability Zone. This distinction is one of the most commonly tested topics in SAA-C03 Domain 4.

  • In the RI purchase form, look at the Availability Zone field.
  • Leave the Availability Zone field blank.

When this field is blank, the RI is Regional. This means the discount applies to matching instances in any AZ across the region.

  • Now select a specific AZ from the Availability Zone dropdown (e.g. us-east-1a).

When you specify an AZ, the RI becomes Zonal. The discount only applies in that one AZ, but you gain a guaranteed capacity reservation there.

Why does this matter for the exam?

Regional RIs provide size flexibility within the same instance family (e.g. an m5.xlarge RI can cover two m5.large instances using normalization factors). They do NOT provide a capacity reservation.

Zonal RIs provide a capacity reservation in the specific AZ for your account. They do NOT provide size flexibility. The discount only applies to instances in that one AZ.

Exam questions frequently test whether you know that Regional = flexibility with no capacity guarantee, and Zonal = capacity guarantee with no flexibility.

Explore the RI Marketplace

AWS provides a marketplace where customers can sell their unused Reserved Instances to other AWS customers. Not all RI types can be listed here, and that constraint is an important exam detail.

  • In the left navigation pane of the EC2 Console, click Reserved Instances to return to the main RI page.
  • Look for the Reserved Instance Marketplace option. This may appear as a tab or a separate link on the Reserved Instances page.
  • Browse the marketplace listings to see what is available.

Which RIs can be sold on the Marketplace?

Only Standard RIs can be listed for sale on the RI Marketplace. If your workload changes and you no longer need a Standard RI, you can sell the remaining term to another customer.

Convertible RIs cannot be sold on the Marketplace. However, they can be exchanged for other Convertible RIs with different attributes (instance family, OS, tenancy, scope). This exchange flexibility is why they cannot be resold.

Exam trap to remember

If a question asks how to recoup costs from an unused RI, the answer depends on the offering class. Standard RI: sell on the Marketplace. Convertible RI: exchange for one that matches your new workload.

  • Take note of these key constraints for your decision matrix later:
  • Standard RI: up to 72% discount, cannot exchange attributes, CAN sell on Marketplace.
  • Convertible RI: up to 66% discount, CAN exchange for different attributes, cannot sell on Marketplace.

Don't see the RI Marketplace option?

The Marketplace interface may vary by region. Make sure you are in a supported region like us-east-1 (N. Virginia). If you still cannot find it, the key takeaway is the same: only Standard RIs are eligible for resale.

Can't find the RI Marketplace in my region

You have now explored the full RI purchase experience without spending a cent. Next up, you will navigate the Savings Plans interface in the Billing Console to see how AWS offers a more flexible alternative to Reserved Instances.

Explore Savings Plans in the Billing Console

In the previous step, you explored Reserved Instances and their configuration options directly in the EC2 console. You now understand how Standard and Convertible RIs differ, and how Regional vs Zonal scope affects flexibility and capacity.

AWS introduced Savings Plans as a more flexible alternative to Reserved Instances. Instead of locking you into a specific instance type, Savings Plans let you commit to a dollar-per-hour spend in exchange for discounted rates. In this step, you will explore the Savings Plans purchase flow and the recommendation engine that AWS provides in the Billing console.

In this step, get ready to:
  • Navigate to the Savings Plans section in the Billing and Cost Management Console.
  • Walk through the Savings Plans purchase flow and compare plan types.
  • Explore Reservation Recommendations for EC2.
Navigate to Savings Plans overview and recommendations

Savings Plans live in a different console than Reserved Instances. While RIs are managed from the EC2 console, Savings Plans are managed from the Billing and Cost Management Console. This is because Savings Plans can apply across multiple services, not just EC2.

  • In the AWS Console search bar at the top, type Billing and select Billing and Cost Management.
  • In the left navigation pane, click Savings Plans to expand the submenu.
  • Click Overview.

If you have no Savings Plans, you will see an explanation of how they work along with any recommended purchases based on your past usage. Since this is an exploration exercise, seeing an empty state here is expected.

  • Now click Recommendations under the Savings Plans submenu.
  • Review the recommendation parameters displayed: Savings Plan type, Term, Payment option, and Lookback period.

What is the Lookback period?

The Lookback period tells AWS how many days of your historical usage to analyze when generating recommendations. Options are 7, 30, or 60 days.

A longer lookback period smooths out usage spikes and gives more conservative recommendations. A shorter period captures recent changes in your workload patterns.

Why are my recommendations empty?

AWS generates Savings Plans recommendations based on your historical On-Demand usage. If you have little or no EC2 usage history, the recommendations will be empty. This is completely expected for this exploration exercise.

Walk through the Savings Plans purchase flow

Now you will explore the actual purchase interface to understand what options are available. You will NOT submit a purchase.

  • In the left navigation pane under Savings Plans, click Purchase Savings Plans.
  • Observe the Savings Plan type dropdown. You should see four options: Compute Savings Plans, EC2 Instance Savings Plans, Database Savings Plans, and SageMaker AI Savings Plans.
  • Select EC2 Instance Savings Plans from the dropdown.
  • Notice that additional fields appear: you must select a Region and an Instance Family. This is because EC2 Instance Savings Plans are locked to a specific instance family in a chosen region.
  • Now switch the dropdown to Compute Savings Plans. Notice that the Region and Instance Family fields disappear. Compute Savings Plans apply across any instance family, region, OS, and even across EC2, Fargate, and Lambda.
  • Observe the Term options: 1-year or 3-year.
  • Observe the Payment option choices: All Upfront, Partial Upfront, or No Upfront.
  • Notice the Hourly commitment field. This is where you would enter your committed spend, measured in dollars per hour ($/hr).

What is a $/hour commitment?

Unlike Reserved Instances where you commit to a specific instance type, Savings Plans use a dollar-per-hour commitment. You agree to spend a certain amount per hour on eligible compute usage. In return, AWS gives you discounted rates on that usage.

Any usage above your committed amount is charged at regular On-Demand rates. The commitment cannot be changed after purchase.

How do the four Savings Plans types compare?

  • Compute Savings Plans: up to 66% off. Applies across EC2, Fargate, and Lambda in any region, family, or OS.
  • EC2 Instance Savings Plans: up to 72% off. Locked to a specific instance family and region, but flexible across size, OS, and tenancy within that family.
  • Database Savings Plans: up to 35% off. Covers Aurora, RDS, DynamoDB, ElastiCache, DocumentDB, Timestream, Neptune, Keyspaces, DMS, and OpenSearch.
  • SageMaker AI Savings Plans: up to 64% off. Applies to SageMaker instance usage.

Do NOT submit the purchase

This is an exploration exercise only. Do not click the final purchase button. Savings Plans commitments cannot be canceled once purchased, and you would be locked into paying for 1 or 3 years.

Explore Reservation Recommendations for EC2

AWS also provides Reserved Instance recommendations in the same Billing console. These recommendations analyze your On-Demand usage history and suggest RI purchases that would save you money.

  • In the left navigation pane, click Reservations to expand the submenu.
  • Click Recommendations.
  • Select Amazon EC2 as the service.
  • Explore the recommendation parameters: Term (1-year vs 3-year), Offering Class (Standard vs Convertible), Payment Option, and Lookback period (7, 30, or 60 days).
  • Try switching between different Term and Offering Class values to see how the recommendations change.

How are these different from Savings Plans recommendations?

Reservation Recommendations suggest specific Reserved Instance purchases for EC2 (and other services like RDS, ElastiCache). They are based on your historical On-Demand usage and update at least every 24 hours.

Savings Plans recommendations suggest a dollar-per-hour commitment instead. Both tools analyze your usage history, but they recommend different pricing mechanisms.

Empty recommendations are normal

If you see no recommendations, it means your account has little or no EC2 On-Demand usage in the lookback period. This is expected for a learning account. In a production environment, these recommendations would populate with specific instance types and projected savings.

How does AWS apply discounts when you have both RIs and Savings Plans?

AWS applies discounts from narrowest to broadest. Reserved Instances are applied first, then EC2 Instance Savings Plans, then Compute Savings Plans. This order ensures you get the maximum discount from your most specific commitments before the broader ones kick in.

You have now explored all the key tools in the Billing console for commitment-based pricing. Next up, you will use the AWS Pricing Calculator to model actual cost comparisons between On-Demand, Reserved Instances, and Savings Plans for a realistic workload.

Model Costs in the AWS Pricing Calculator

You have now explored both the RI purchase wizard and the Savings Plans recommendation engine directly in the AWS console.

Knowing what options exist is one thing. Seeing the actual dollar difference between On-Demand, Reserved Instances, and Savings Plans for the same workload is what makes cost optimization decisions concrete. The AWS Pricing Calculator lets you model these scenarios side by side without committing to anything.

In this step, get ready to:
  • Create a multi-scenario estimate comparing On-Demand, Reserved Instance, and Savings Plans pricing for an m5.xlarge instance.
  • Review breakeven analysis to understand when commitments become cheaper than On-Demand.
  • Export your estimate for future reference.
Create your On-Demand and Reserved Instance estimates

The AWS Pricing Calculator is a free web-based tool that does not require an AWS account to use. You will create multiple EC2 configurations with different pricing models so you can compare them directly.

  • Open a new browser tab and navigate to https://calculator.aws/.
  • Click Create estimate.
  • In the search bar, type Amazon EC2 and click Configure on the Amazon EC2 result.
  • Set Region to US East (N. Virginia).
  • Set Operating System to Linux.
  • Set the instance type to m5.xlarge.
  • In the Payment options section, select On-Demand as the pricing model.
  • Note the monthly cost displayed. This is your baseline.
  • Save this configuration and add it to your estimate.

Why m5.xlarge?

The m5 family is a general-purpose instance type that appears frequently in SAA-C03 exam scenarios. Using a consistent instance type across all your pricing model comparisons makes the cost differences easy to see.

Now add a Reserved Instance configuration to see how the discount compares.

  • Add another EC2 configuration with the same settings: m5.xlarge in US East (N. Virginia) with Linux.
  • Change the pricing model to Reserved.
  • Set Term to 1-year.
  • Set Offering Class to Standard.
  • Set Payment Option to No Upfront.
  • Note the monthly cost. Compare it to your On-Demand figure.
  • Save this configuration and add it to your estimate.

Finally, add a third configuration to see the maximum RI discount.

  • Add another EC2 configuration with the same instance: m5.xlarge, US East (N. Virginia), Linux.
  • Set the pricing model to Reserved.
  • Set Term to 3-year.
  • Set Offering Class to Standard.
  • Set Payment Option to All Upfront.
  • Note the monthly cost and upfront cost. This combination (3-year, Standard, All Upfront) provides up to 72% off On-Demand pricing.
  • Save this configuration and add it to your estimate.

Why does more upfront payment mean a larger discount?

AWS offers a steeper discount when you pay more upfront because they receive the revenue immediately. All Upfront gives the largest discount, Partial Upfront is in the middle, and No Upfront gives the smallest discount (but still cheaper than On-Demand).

Similarly, a 3-year term provides a bigger discount than a 1-year term because you are committing for longer.

Can't find the Payment options section?

Make sure you have scrolled down past the instance configuration fields. The payment options and pricing model selection appear further down the configuration page. If you do not see a pricing model dropdown, ensure you selected Amazon EC2 (not a different service).

help me find the pricing model options in the AWS Pricing Calculator

Add a Savings Plans estimate for comparison

Reserved Instances lock you to a specific instance type. Savings Plans offer a different tradeoff: you commit to a dollar-per-hour spend instead, and the discount applies more flexibly. Let's add a Savings Plans configuration to see how the rates compare.

  • Add another EC2 configuration with the same settings: m5.xlarge in US East (N. Virginia) with Linux.
  • Select the Savings Plans pricing model.
  • Compare the rates shown for Compute Savings Plans vs EC2 Instance Savings Plans.
  • Click Show calculations to view the breakeven analysis and utilization summary.
  • Save this configuration and add it to your estimate.

What does the breakeven analysis tell me?

The Pricing Calculator assumes 730 hours per month (365 days x 24 hours / 12 months). The breakeven analysis shows you at what utilization level your Savings Plans commitment becomes cheaper than paying On-Demand.

If your instance runs 24/7, you are at 100% utilization and the Savings Plan saves you money from day one. If your instance only runs part-time, the breakeven point tells you whether the commitment is still worth it.

Compute Savings Plans vs EC2 Instance Savings Plans

Compute Savings Plans offer up to 66% off and apply across EC2, Fargate, and Lambda in any region, family, or OS. EC2 Instance Savings Plans offer up to 72% off but are locked to a specific instance family in a specific region.

The tradeoff is flexibility vs discount size. This is a common SAA-C03 exam question pattern.

Organize, review, and export your estimate

With all your configurations added, you can now see the full cost comparison on a single summary page. Grouping your estimates makes it easier to compare pricing models at a glance.

  • Navigate to the My Estimate summary page.
  • Use the Group feature to organize your configurations into three groups: On-Demand Group, RI Group, and Savings Plan Group.
  • Review the summary showing upfront costs, monthly costs, and 12-month total costs across all configurations.
  • Click Export and save your estimate as CSV or PDF for your records.

What should I see on the summary page?

Your summary page should show three groups with the On-Demand configuration having the highest monthly cost, the 1-year No Upfront RI in the middle, and the 3-year All Upfront RI showing the lowest effective monthly cost. The Savings Plans configuration should fall between On-Demand and the maximum RI discount.

Keep this estimate for your decision matrix

The exported estimate becomes your reference for the next step, where you will build a decision matrix mapping each pricing model to its best use case. Having real dollar amounts makes the matrix much more meaningful than abstract percentages.

Estimate showing unexpected values?

Double check that all configurations use the same instance type (m5.xlarge), the same region (US East N. Virginia), and the same OS (Linux). If any of these differ between configurations, the cost comparison will not be accurate.

help me troubleshoot my AWS Pricing Calculator estimate

You now have a concrete, numbers-backed comparison of every major EC2 pricing model. Next up, you will use these figures to build a decision matrix that maps each model to its ideal workload scenario for the SAA-C03 exam.

Build Your Pricing Model Decision Matrix

You now have real pricing data from the AWS Pricing Calculator showing exactly how much you save with Reserved Instances and Savings Plans.

The SAA-C03 exam does not ask you to calculate exact dollar amounts. It tests whether you can match a workload scenario to the correct pricing model based on flexibility, commitment, and capacity requirements.

In this step, you will consolidate everything you have explored into a single decision matrix document. This matrix becomes your go-to reference for Domain 4 questions about cost-optimized architectures.

In this step, get ready to:
  • Create a decision matrix covering all seven EC2 pricing models with discount levels, flexibility, and use cases.
  • Add exam-critical distinctions that highlight common SAA-C03 traps and distractors.
  • Work through four exam-style scenarios applying your decision framework.
Create your decision matrix document

A decision matrix organizes every pricing model side-by-side so you can quickly identify which model fits a given scenario. Each row captures the attributes that differentiate one model from another on the exam.

  • Open any text editor or note-taking tool (Notepad, TextEdit, Google Docs, or Notion all work).
  • Create a new document and title it EC2 Pricing Model Decision Matrix.
  • Add the following column headers across the top row:
| Pricing Model | Max Discount | Flexibility | Commitment | Capacity Reservation | Best Use Case |
  • Now populate the matrix with all seven pricing models. Add the following rows one at a time:
| On-Demand | 0% | Maximum flexibility | No commitment | No capacity guarantee | Unpredictable/short-term workloads |
| Standard RI | Up to 72% | Locked to instance type | 1 or 3-year term | Zonal only | Steady-state predictable workloads |
| Convertible RI | Up to 66% | Can exchange attributes | 1 or 3-year term | Zonal only | Predictable workloads needing flexibility to change instance family |
| Compute Savings Plans | Up to 66% | Any family/region/OS/service | 1 or 3-year $/hr commitment | None | Workloads spanning EC2/Fargate/Lambda across regions |
| EC2 Instance Savings Plans | Up to 72% | Within family + region | 1 or 3-year $/hr commitment | None | Steady workloads within one instance family in one region |
| On-Demand Capacity Reservation | 0% | Any duration | No term commitment | Guaranteed capacity in specific AZ | Business-critical events needing guaranteed capacity |
| Spot Instances | Up to 90% | Can be interrupted | None | None | Fault-tolerant/flexible workloads |

What do these columns mean?

Max Discount is the maximum percentage off On-Demand pricing. Higher discounts come with stricter commitment or less flexibility.

Flexibility describes what you can change after purchase. Commitment is the lock-in period or billing obligation.

Capacity Reservation indicates whether the pricing model guarantees you physical instance capacity in an Availability Zone. This is different from a billing discount.

Why do Savings Plans and Standard RI share the same 72% discount?

EC2 Instance Savings Plans and Standard RIs both offer up to 72% off because they require the same level of commitment: locking into a specific instance family within a specific region. The difference is in the mechanism. RIs reserve specific instance configurations, while Savings Plans commit to a dollar-per-hour spend.

  • Save your document.
  • Verify you have seven rows (one per pricing model) plus the header row.
Add exam-critical distinctions to your matrix

The SAA-C03 exam loves testing subtle differences between pricing models that sound similar. Adding a dedicated "Key Exam Trap" column captures the distinctions that trip up test-takers.

  • Add a new column to your matrix titled Key Exam Trap.
  • Populate the Key Exam Trap column with the following entries for each pricing model:
# Key Exam Trap column values:

# On-Demand:
No trap - baseline pricing model

# Standard RI:
Cannot be exchanged for different attributes - can ONLY be modified (AZ, size, networking)

# Convertible RI:
Cannot be sold on the RI Marketplace - can only be exchanged for other Convertible RIs

# Compute Savings Plans:
Does NOT provide capacity reservations - purely a billing discount

# EC2 Instance Savings Plans:
Does NOT provide capacity reservations - purely a billing discount

# On-Demand Capacity Reservation:
Provides NO discount - charges On-Demand rates. CAN be combined with Regional RI or Savings Plans for both discount AND capacity

# Spot Instances:
Spot Blocks are deprecated (retired Dec 2022) - this is an exam distractor

Why are these exam traps important?

The exam tests two patterns repeatedly. First, it offers "Standard RI" as an answer when the scenario requires changing instance families (wrong, because Standard RIs cannot be exchanged). Second, it suggests "Savings Plans" when the scenario needs guaranteed capacity (wrong, because Savings Plans are only a billing mechanism).

The Regional vs Zonal distinction is also critical. Regional RIs provide size flexibility within an instance family but NO capacity reservation. Zonal RIs provide capacity reservation but NO size flexibility. Many exam questions hinge on this exact trade-off.

  • Add one more note at the bottom of your matrix documenting the Regional vs Zonal RI distinction:
# Regional vs Zonal RI Quick Reference:
# Regional RI (no AZ specified): Size flexibility within instance family, discount across all AZs, NO capacity reservation
# Zonal RI (AZ specified): Capacity reservation in that specific AZ, NO size flexibility, discount only in that AZ
  • Save your document.
  • Your matrix should now have seven columns: Pricing Model, Max Discount, Flexibility, Commitment, Capacity Reservation, Best Use Case, and Key Exam Trap.
Work through exam-style scenarios

The real test of your matrix is whether you can apply it to scenario questions. These four scenarios mirror the format and complexity of SAA-C03 Domain 4 questions.

  • Add a new section in your document titled Exam-Style Scenarios.
  • For each scenario below, read the question, identify the key requirements, then write your answer and reasoning before checking the solution.

Add Scenario 1 to your document:

## Scenario 1
A company runs a web application 24/7 on m5.xlarge instances in us-east-1.
They want maximum savings and are certain they will not change instance families for 3 years.

Key requirements: Maximum savings, locked to m5, 3-year certainty

Answer: Standard RI, 3-year term, All Upfront
Reasoning: Standard RI offers up to 72% discount (the highest for commitment-based models).
3-year All Upfront maximizes the discount. Since they will not change instance families,
the inflexibility of Standard RI is acceptable.

How to identify the key requirements

Look for three signals in every scenario: the workload pattern (steady vs variable vs interruptible), the flexibility needs (will they change instance types, regions, or services?), and the time horizon (short-term vs 1 year vs 3 years). These three signals map directly to your matrix columns.

Add Scenario 2 to your document:

## Scenario 2
A company runs mixed workloads across EC2, Fargate, and Lambda in multiple regions.
They want savings but need flexibility to shift between services.

Key requirements: Multi-service (EC2 + Fargate + Lambda), multi-region, flexibility needed

Answer: Compute Savings Plans
Reasoning: Compute Savings Plans offer up to 66% discount and apply across EC2, Fargate,
and Lambda in ALL regions. This is the only pricing model that spans multiple compute services.
EC2 Instance Savings Plans would not cover Fargate or Lambda. RIs only cover EC2.

Add Scenario 3 to your document:

## Scenario 3
A company needs guaranteed capacity in us-east-1a for a critical application AND wants a discount.

Key requirements: Guaranteed capacity in a specific AZ + cost savings

Answer: Combine On-Demand Capacity Reservation with a Regional RI or Savings Plan
Reasoning: No single product provides both capacity guarantee AND maximum discount flexibility.
On-Demand Capacity Reservation guarantees capacity in the AZ but charges On-Demand rates.
Regional RI or Savings Plans provide the billing discount that applies to the reserved capacity.
A Zonal RI alone also provides both capacity and discount, but with less flexibility
(no size flexibility, locked to that specific AZ).

The combination pattern

Whenever an exam question asks for BOTH guaranteed capacity AND a discount, the answer almost always involves combining two products. Savings Plans alone never guarantee capacity. On-Demand Capacity Reservations alone never provide discounts.

Add Scenario 4 to your document:

## Scenario 4
A company has steady c5 family usage in eu-west-1 but occasionally changes
between c5.large and c5.2xlarge.

Key requirements: Single instance family (c5), single region (eu-west-1), size flexibility needed

Answer: EC2 Instance Savings Plans for c5 in eu-west-1
Reasoning: EC2 Instance Savings Plans offer up to 72% discount and automatically apply
across sizes within the same instance family in one region. The c5.large to c5.2xlarge
changes are handled automatically. Alternatively, a Regional Standard RI for c5 would
also provide size flexibility within the family (via normalization factors).
  • Save your completed document.
  • Review your four scenarios and confirm each answer references your matrix to justify the choice.

How discounts are applied in order

AWS applies pricing discounts in a specific order: Reserved Instances first, then EC2 Instance Savings Plans, then Compute Savings Plans. Narrower commitments are applied before broader ones. This means if you have both an RI and a Compute Savings Plan, the RI discount applies first to matching instances.

Your decision matrix is complete. You now have a single reference document that maps every EC2 pricing model to its optimal use case, complete with exam traps and worked scenarios. Next up, the Secret Mission challenges you to design a real-world strategy that combines capacity reservations with discount mechanisms.

Secret mission

Create a Capacity + Discount Combination Strategy

SAA-C03 exam questions often ask how to achieve BOTH guaranteed capacity AND discounted pricing simultaneously. This is one of the trickiest patterns because no single product provides both at maximum flexibility. Build a reference document that maps out every valid combination strategy.

Clean Up Your Resources

Clean Up Your Resources

This project runs entirely in browser-based AWS console tools and the AWS Pricing Calculator. No cloud resources were purchased or provisioned, so there are no ongoing costs.

Decide whether to keep your estimates and documents for future reference, or clean them up.

Resources you used:

  • AWS Pricing Calculator estimates (saved in your browser session or exported as CSV/PDF).
  • Decision matrix document (local text file or note-taking tool).
  • Screenshots and notes from the RI purchase wizard and Savings Plans console.
  • Capacity + Discount combination strategy document (Secret Mission).

Keep everything running

No action needed. Choose this if you plan to reference your pricing estimates and decision matrix while studying for the SAA-C03 exam.

  • Your AWS Pricing Calculator estimates remain accessible at the share link or in your browser history.
  • Your local decision matrix and notes stay on your machine.
  • No AWS resources are running and no charges are accumulating.

Pause - I'll come back to this later

Since no cloud resources were created, there is nothing to pause. Your local files and exported estimates will be available whenever you return.

  • Save your AWS Pricing Calculator estimate by exporting it as CSV or PDF if you have not already.
  • Keep your decision matrix document in a folder you can find later.

Delete - I don't want to use this again

Remove all project files and estimates if you no longer need them.

  • Delete your exported Pricing Calculator CSV or PDF files from your local machine.
  • Delete your decision matrix document and any screenshots you saved.
  • Clear your AWS Pricing Calculator estimates by opening the calculator and removing saved configurations.

That's a Wrap!

That's a Wrap!

Nice work! You have completed a comprehensive exploration of EC2 cost optimization strategies, directly targeting SAA-C03 Domain 4 (Cost-Optimized Architectures).

You now have hands-on experience navigating the exact AWS console tools that inform real-world Reserved Instance and Savings Plans purchase decisions.

Here's what you accomplished:

  • Explored the Reserved Instance purchase wizard and the Savings Plans recommendation engine in the AWS Billing Console to understand Standard vs Convertible, Regional vs Zonal, and all payment options.
  • Built a multi-scenario cost comparison in the AWS Pricing Calculator covering On-Demand, Reserved Instance, and Savings Plans pricing for the same workload.
  • Created a decision matrix mapping all EC2 pricing models to their optimal use cases, discount levels, flexibility constraints, and exam traps.
  • Built a Capacity + Discount combination strategy document showing how to pair On-Demand Capacity Reservations with Regional RIs or Savings Plans for guaranteed capacity with cost savings.

Ready to quiz yourself?