Amazon Web Services Inc. is streamlining infrastructure purchases for enterprises that make long-term commitments on its platform.

The cloud giant on Wednesday evening launched Savings Plans, a buying model that offers customers steep discounts if they pay for computing power a year or three years in advance. AWS has already been providing such discounts through its Reserved Instances. However, buying Reserved Instances can be complex because it requires companies to carefully plan out their spending in order to make the most out of the bulk pricing, a task that Savings Plans aims to ease.

The gist is that customers receive a transferable discount they can apply to different AWS instances. The amount of flexibility a company has in how it uses the discount depends on the plan.

The first option, which AWS calls the Compute Savings Plan, provides an up to 66% price reduction with long-term commitments. A Compute Savings Plan can be applied to instances regardless of the data center in which they run, what instance family they belong to and the operating system. If a company makes, say, a three-year instance reservation and AWS releases a family of virtual machines in the second year that have better specifications, administrators can simply carry over the discount to the newer hardware. 

The second option is the EC2 Instance Savings Plan. It provides higher savings of up to 72%, but customers can use the discount with only one instance family they select upon purchase and in one AWS data center region.

An up to 72% reduction in cloud infrastructure expenses certainly qualifies as a big price cut, but the Savings Plans are only the second most cost-effective buying option on AWS. The first place belongs to Spot Instances. These are virtual machines that run on unused infrastructure in the provider’s data centers and are available up to 90% off, but come with a catch: AWS deprovisions Spot Instances when it needs the infrastructure back with an only two-minute notice.

Photo: SiliconANGLE