Annual WACC Percent
0.00
30.00
Percentage of Usage to Cover Using 1-yr SPs
0
100
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How to Choose between No Upfront, Partial Upfront and All Upfront AWS Compute Savings Plans
Overview
AWS Savings Plans can be purchased using three different payment options:
No upfront (NUF) month-to-month payment
Partial upfront (PUF) with a 50% down payment and the remainder paid monthly
Full upfront (AUF) as a 100% lump sum.
Paying more upfront results in a higher discount, typically up to 10% more in savings. However, to determine if it is financially prudent to lock in funds with AWS, one must consider the cost of capital, known as the Weighted Average Cost of Capital (WACC). You can adjust the WACC used for the calculations using the left sidebar controls.
This tool compares the Discounted Cash Flows (DCF) of all available Savings Plans payment options and additionally we compare to the DCF of CloudFix RightSpend solution.
To maintain flexibility, AWS customers often choose to commit to a 1-year term instead of a 3-year term, despite roughly 50% lower savings. You can adjust the percentage of usage covered by 1-year Savings Plans using the slider on the left.
Calculation Details
Monthly WACC
First, we convert the annual 10.00% WACC into 0.80% monthly WACC, which when compounded for 12 months, results in the annual WACC.
Monthly Recurring DCF
If we pay 1/36 of the amount over the course of 36 months, the DCF of these recurring payments will be 86.53% of the DCF of a lump sum payment.
Annual Recurring DCF
For 1-year Savings Plans over the course of 3 years, the recurring DCF remains the same, but we will need to repurchase the upfront portion once per year. The DCF of these three payments is 91.12% of the DCF of a lump sum payment.
Monthly WACC Formula
Monthly Recurring DCF Formula
Annual Recurring DCF Formula
Usage Data
Please input your hourly usage data into the designated text area below. Sample usage data is available for your reference.
us-east-1 t4g.small 40
us-east-1 m3.large 200
us-east-1 c6a.large 1800
Data Format Instructions
Sample CUR Query
Terms and Payment Options for each Usage Type
The table below illustrates the usage by type and the projected Discounted Cash Flow (DCF) cost when covered by Savings Plans over a period of three years.
The columns labeled Region, Instance Type, Platform, and Tenancy detail the type of usage.
The Amount column indicates the number of running instances to be covered.
The Term column specifies the duration of the Savings Plans, either one year or three years, ensuring the desired mix of one-year and three-year Savings Plans is achieved. Adjustments to this mix can be made in the left side panel.
The Upfront column indicates the optimal payment option for the specified usage type.
The following three columns — NUF DCF, PUF DCF, and AUF DCF — compare the Discounted Cash Flow (DCF) of various payment options.
The final column, RightSpend DCF, displays the DCF cost if covered using CloudFix RightSpend.
Suggested Savings Plans Mix
The total cash flow discounted to the present value of the suggested mix of SPs equal to $2,156,181.
When using CloudFix RightSpend, the DCF would be $1,712,259, which is 20.59% less than the suggested mix of Savings Plans. Additionally, RightSpend can dynamically scale the commitment based on usage to ensure there are no unused reservations even during drawdowns in usage. Read more about RightSpend here.
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