Suboptimal Use of Compute Savings Plans for Specialized Instances

David Gross

Service Category

Compute

Cloud Provider

AWS

Service Name

AWS EC2

Inefficiency Type

Suboptimal Pricing Model

Explanation

Accelerated EC2 instance types such as `p5.48xlarge` and `p5en.48xlarge (often used for ML/AI workloads)` are eligible for Compute Savings Plans, but the discount rates offered are modest compared to more common instance families. When organizations rely solely on CSPs, these lower priority instances are typically the last to benefit from the plan, especially if other instance types consume most of the discounted hours.

As a result, p5 usage may fall through the cracks and be billed at full On-Demand rates despite an active CSP. This dynamic makes CSPs a potentially inefficient choice for workloads that heavily or predictably rely on these instance types. EC2 Instance Savings Plans provide better discount targeting for known usage patterns, and AWS now offers dedicated P5 and P5en Instance Savings Plans with up to 40% savings specifically for these instance types. Additionally, while Capacity Blocks offer the steepest discount, they come with operational rigidity and inflexible scheduling constraints that limit their applicability.

Relevant Billing Model

AWS EC2 instances can be purchased via multiple pricing models: On-Demand, Compute Savings Plans (CSPs), EC2 Instance Savings Plans, Reserved Instances, and Capacity Blocks (for specific accelerated instance types).

Compute Savings Plans apply dollar-based discounts based on discount percentage priority, with savings first applied to usage with the highest discount percentage. If multiple instances have the same discount percentage, the plan applies to usage with the lowest rate. This allocation methodology can result in accelerated instances like p5.48xlarge and p5en.48xlarge receiving lower priority if its discount percentages are less competitive than other instance types in the environment.

For accelerated instances like `p5.48xlarge` and `p5en.48xlarge`, CSPs may offer relatively low discount rates, which makes them both less cost-effective and deprioritized in CSP allocation. This can lead to uncovered spend on these expensive instances unless the total CSP commitment is large enough to cover all usage.

Detection

Review usage patterns of high-cost accelerated instances such as `p5.48xlarge` and `p5en.48xlarge`
Determine if these instances are being run consistently at high utilization levels
Assess how much of their usage is actually covered under existing Compute Savings Plans
Verify current CSP discount rates for various instances in your specific regions, as rates vary by region, term, and payment option
Evaluate whether other instance types with higher CSP discount rates are exhausting the plan allocation
Compare costs against dedicated EC2 Instance Savings Plans (up to 40% savings) for predictable workloads
Confirm whether an EC2 Instance Savings Plan would have better alignment with observed usage patterns
Identify potential overcommitment risks if CSPs were scaled up solely to include p-type instance usage

Remediation

Consider using dedicated EC2 Instance Savings Plans instead of CSPs for predictable, high-utilization p5 workloads
Model CSP allocation on actual discount percentages in order to determine whether p-type instances are likely to be left uncovered
Compare total cost of ownership between CSPs and dedicated instance savings plans for your specific usage patterns
Evaluate potential fit for Capacity Blocks only if workloads are short-term, highly predictable, and operationally isolated
Ensure any long-term commitment aligns with actual usage patterns and instance mix
Review and update savings plan strategy as AWS introduces new instance-specific savings plan options

Relevant Documentation

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