Best Practice 18.1 – Understand the payment and commitment options available for Amazon EC2
Consider the use of Reserved Instances and Savings Plans to provide a significant discount compared to on-demand pricing. They are available with 1-year and 3-year commitment terms with three payment options: All Upfront, Partial Upfront, and No Upfront.
Suggestion 18.1.1 – Understand the breakeven points between pricing models
Reserved Instances are categorized into Standard Reserved Instances (up to 72% discount off on-demand rates) and Convertible Reserved Instances (up to 54% discount off on-demand rates). Savings Plans are categorized into Compute Savings Plans (up to 66% discount off on-demand rates) and EC2 Instance Savings Plans (up to 72% discount off on-demand rates).
The discount off the Amazon EC2 on-demand hourly rate you can achieve will depend on the following factors:
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Commitment term selected
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Payment option selected
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Reserved Instance or Savings Plan type selected
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Instance family
Memory-optimized instance families, such as X2
, X1
, and
X1e
, provide higher savings for commitment. Therefore, understanding pricing
options is important for SAP, particularly for SAP HANA workloads.
Use the advanced option within the AWS Pricing Calculator to determine the break-even point. You should be aware of the assumptions used by this calculator. To illustrate this, consider the example where we use the following formula to determine the point using a Reserved Instance or Savings Plan will provide a lower TCO than using on-demand for each instance family.
(Effective Hourly rate of Commitment / Hourly rate of On-Demand) * 730 hours
Reference the effective hourly rate for each RI commitment term
and type
Example 1: In North Virginia (us-east-1), for the M5 family, the breakeven where a 3 year no upfront Standard Reserved Instance or EC2 Savings Plan would offer a lower TCO is 315 hours per month (~16 hrs a day, Monday to Friday).
Example 2: In North Virginia (us-east-1), for the X1 instance family, the breakeven where a 3 year no upfront Standard Reserved Instance or EC2 Savings Plan would offer a lower TCO is 235 hours per month (~12 hrs a day, Monday to Friday).
Use comprehensive guidance on cost management
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AWS Documentation: Savings Plans - Compute Savings Plans and Reserved Instances
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AWS Documentation: Savings Plans - Plan Types
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AWS Documentation: Types of Reserved Instances
Suggestion 18.1.2 – Understand the considerations of each pricing model relevant to SAP
In addition to the hourly rate discount, there are other benefits of Reserved Instances and Savings Plans you should consider. This AWS Documentation: Comparing Savings Plans to RIs table provides a comparison of Reserved Instances and Savings Plans.
Zonal Reserved Instances can be used to provide capacity reservations within a specific Availability Zone. Savings Plans do not provide a capacity reservation but you can combine with On-demand Capacity Reservations to provide the same features of a Zonal Reserved Instance. See [Reliability]: Best Practice 10.2 - Select an architecture suitable for your availability and capacity requirements, for further information on capacity strategies.
Amazon EC2 Spot Instances
When using on-demand instances, you should consider the additional operational impact of stopping and starting the SAP systems and underlying EC2 instances based on the required operating hours in addition to application performance impact each time the system is started.
Suggestion 18.1.3 – Evaluate your enterprise strategy for consolidated billing and sharing of Reserved Instance and Savings Plans commitment
With Consolidated Billing, Reserved Instances and Savings Plans are applied to usage across all accounts within an AWS Organization. The management account of an organization can turn off the Reserved Instance discount and Savings Plans discount sharing for any accounts in that organization, including the management account. This means that Reserved Instances and Savings Plans discounts aren't shared between any accounts that have sharing turned off. To share a Reserved Instances or Savings Plans discount with an account, both accounts must have sharing turned on. This preference isn't permanent, and you can change it at any time.
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AWS Documentation: Consolidated billing for AWS Organizations
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AWS Documentation: Turning off reserved instances and Savings Plans discount sharing
A key factor that will determine your strategy for sharing of commitment will be the overall AWS account strategy your organization has adopted. Whether your SAP workloads are running in their own dedicated AWS accounts or along with other workloads hosted in AWS should also be considered. To understand how discounts for Reserved Instances and Savings Plans are applied across your organization’s consolidated bill refer to:
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AWS Documentation: Understanding Consolidated Bills
As detailed in SAP note: 1656250 - SAP on AWS: Support
prerequisites
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AWS Documentation: Compare AWS Support Plans
Be aware that AWS calculates support fees independently for each member account within an organization.