Savings Plans and Reserved Instances

Learn how Savings Plans and Reserved Instances discount compute usage in exchange for an hourly commitment over one or three years, and how they're billed.

A commitment is an agreement to spend a fixed amount per hour on compute instances for one or three years. In return, the instance usage that the commitment covers is billed at a discounted rate. There are two kinds: Savings Plans and Reserved Instances. You find them under BillingCommitments.

Savings Plans and Reserved Instances

	Savings Plan	Reserved Instances
Covers	Every eligible compute class, or one class that you choose.	One compute family and size, for example the size of your database servers.
Discount	A percentage off each covered size's own list rate.	A fixed rate for that size.
Flexibility	Usage can move between sizes, and between classes if you didn't choose one, and stays covered.	Usage of any other size isn't covered.

Both kinds:

cover compute instances only: not volumes, Floating IPs, traffic, or other services;
cover usage in your subscription's default region;
keep their discount for the whole term, and a Reserved Instance also keeps its rate, even when list prices change;
run for 1 year or 3 years.

The discount depends on the compute class, the kind, the term, and the payment option. The purchase page shows it before you buy. A class that the platform doesn't discount isn't offered.

How coverage works

You choose the hourly commitment: the amount that you commit to spend per hour, at the discounted rate. In every hour, usage up to that amount is billed at the discounted rate, and usage above it at the list rate. What an hour doesn't use doesn't carry over to the next hour.

Example. A Savings Plan of 8 per hour with a discount of 20 % covers up to 10 per hour of usage at list rates, because 10 less 20 % is 8:

Your usage in an hour, at list rates	Covered	At list rate	Your cost for the hour	Without the plan
15	10, billed 8	5	13	15
10	10, billed 8	0	8	10
6	6, billed 4.80	0	8, because 3.20 of the commitment went unused	6

So a commitment saves money in the hours when your usage, at list rates, is above the hourly amount, and costs more in the hours when it's below. Size it to the part of your compute usage that runs around the clock.

How a commitment is billed

Over its term, a commitment costs its hourly amount for every hour, whether usage uses it or not. The payment option decides when you pay:

Payment option	At purchase	Covered usage is billed at	Unused hours
All upfront	The hourly amount for the whole term.	Nothing more.	Already paid.
Partial upfront	Half of the hourly amount for the whole term.	Half of the discounted rate.	The other half is invoiced.
No upfront	Nothing.	The discounted rate.	Invoiced.

The unused part appears on each invoice as an unused commitment line under the service Commitments. For how invoices are built, see Invoices and payments.

The life of a commitment

Status	Meaning
Queued	Configured, but not bought. Nothing is charged, and nothing is covered.
Pending activation	Bought with an upfront payment that the platform's finance team hasn't approved yet. Nothing is covered yet.
Active	In force: usage is covered.
Rejected	The upfront payment was refused, so the commitment never took force. It covers nothing and can't be bought again.

The term starts when the commitment takes force. For when that happens with each payment option, see What happens after you buy. When the term ends, the discount ends, and usage is billed at list rates again. To see whether a commitment is still in force, check its expiry date.

Buy a commitment

Commitments belong to the whole subscription: to view them, you need a role with Read access to Billing & Cost on the subscription. You configure a commitment on the purchase page, which saves it as Queued, and then buy it from its own page. For the steps, the roles, renewal, and what happens until the commitment takes force, see Buy a Savings Plan or Reserved Instance.

Utilization, coverage, and savings

The commitments list and each commitment's page show three figures, calculated from your usage of the last 14 days, or since the commitment took force if that's shorter:

Figure	Meaning
Utilization	The share of the commitment's hourly capacity that your usage used. Below 100 %, you pay for unused hours.
Coverage	The share of your compute usage that the commitment covered: all compute for a Savings Plan, the reserved size for a Reserved Instance. Below 100 %, part of that usage is billed at list rates.
Monthly savings	What the covered usage saved against list rates, extended to a month of 730 hours.

A commitment that isn't in force shows no figures.

Buy a Savings Plan or Reserved Instance: configure, buy, and renew a commitment.
Analyze spend with Cost Explorer: find the steady part of your compute spend before you commit.
Invoices and payments: pay the upfront part and read unused commitment lines.
Cost Management FAQ

Savings Plans and Reserved Instances