What This Calculator Does
Cloud providers like AWS, Azure, and Google Cloud offer Savings Plans (or committed-use discounts) that trade a usage commitment for a lower price than pay-as-you-go "on-demand" rates. This calculator shows exactly how much you would save by switching from on-demand pricing to a savings plan, given your current monthly cost and the discount percentage your commitment unlocks.
How to Use It
Enter your current on-demand monthly cost — the amount you pay today without any commitment. Then enter the savings plan discount as a percentage (for example, 30 for a 30% discount). The calculator returns your monthly savings, your effective (discounted) monthly cost, and your estimated annual savings over 12 months.
The Formula Explained
The math is straightforward. If your on-demand cost is \(C\) and the discount fraction is \(d\) (the percentage divided by 100):
\(\text{Savings} = C \times d\) and \(\text{Effective Cost} = C \times (1 - d)\). Annual savings simply multiplies the monthly savings by 12. The effective cost is what your bill becomes after the discount is applied.
$$\text{Effective Cost} = \text{On-Demand Cost (\$)} \times \left(1 - \frac{\text{Discount (\%)}}{100}\right)$$
Worked Example
Suppose you currently spend $1,000 per month on-demand and a savings plan offers a 30% discount. Savings:
$$\text{Savings} = \$1{,}000 \times 0.30 = \$300 \text{ per month}$$Effective cost:
$$\text{Effective Cost} = \$1{,}000 \times 0.70 = \$700 \text{ per month}$$Over a year that is:
$$\$300 \times 12 = \$3{,}600 \text{ in annual savings}$$FAQ
Does this include upfront payments? No — it models the discounted run-rate. If you pay all-upfront, factor in cash-flow timing separately.
What if my usage varies? Savings plans usually apply up to a committed dollar amount per hour; usage above that bills at on-demand. Use your committed baseline cost for the most accurate estimate.
Is this only for AWS? No. It works for any provider's commitment discount — just plug in the relevant percentage.
