Potential Savings Calculation

AWS instance recommendations for EC2 and RDS often provide insights into potential cost savings by identifying underutilized or oversized resources. The savings calculation is primarily based on the monthly hour usage of instances and how they compare to optimized alternatives.

Monthly/Annual Potential Savings

Monthly Potential Savings is calculated as:
(Current Instance Cost per Hour−Recommended Instance Cost per Hour)×Monthly Usage Hours

Annual Potential Savings is calculated as:*
(Current Instance Cost per Hour−Recommended Instance Cost per Hour)×Monthly Usage Hours x 12

Where:

• Current Instance Cost per Hour – The hourly cost of the currently running instance.
• Recommended Instance Cost per Hour – The hourly cost of the suggested right-sized or optimized instance.
• Monthly Usage Hours – The total number of hours the instance is running in a month (typically 730 hours for always-on instances).

Example Calculation
If an EC2 instance currently costs $0.40 per hour, and the recommended instance costs $0.25 per hour, the potential savings are: ( 0.40 − 0.25 ) × 730 = $109.50 per month, $1314 per year