AWS Savings Plans offer a flexible pricing scheme for cloud resources, allowing businesses to commit to one or three years of usage in exchange for lower prices compared to On-Demand rates. These plans provide discounts on compute usage based on an hourly commitment, but overcommitting can lead to resource waste if usage falls short of the committed amount, while undercommitting results in paying higher On-Demand rates for excess usage. Savings Plans are beneficial when minimal usage can be predicted, though they require careful management and optimization to avoid overprovisioning and ensure cost efficiency. Reserved Instances, another option, offer up to 75% savings but come with risks like vendor lock-in and inflexibility, necessitating accurate forecasting of resource needs. Both options require infrastructure optimization and potential use of automated solutions, such as AI-powered tools, to manage cloud costs effectively. For instance, Iterable leveraged Cast AI to optimize their cloud infrastructure, achieving significant cost savings and enhanced flexibility by maintaining optimal utilization of Savings Plans alongside Spot Instances.