Please explain the discount system in detail and tell me how I should set up a savings plan to maximize my discount.

The discount in AWS Savings Plans comes from the reduced hourly rates you receive compared to On-Demand pricing when you make a commitment to a consistent amount of compute usage.

When you purchase a Savings Plan, you're committing to a specific dollar amount per hour (in your case, $0.323/hour) for a 1-year or 3-year term. In return for this commitment, AWS provides discounted rates on eligible services.

For EC2 instances, there are two main types of Savings Plans:

1. EC2 Instance Savings Plans: These provide up to 72% discount off On-Demand rates but are specific to a particular instance family in a region.

2. Compute Savings Plans: These offer up to 66% discount off On-Demand rates with flexibility across instance family, size, OS, tenancy, and region.

The 17% discount mentioned appears to be the average discount rate being applied to your specific mix of instances. Different instance families and sizes can receive different discount percentages.

To maximize your discount:

1. Choose the right Savings Plan type:

• EC2 Instance Savings Plans offer higher discounts but less flexibility
• Compute Savings Plans offer more flexibility but slightly lower discounts

2. Select the appropriate term:

• 3-year terms offer higher discounts than 1-year terms

3. Choose the right payment option:

• All Upfront (paying the entire amount at the start) provides the highest discount
• Partial Upfront (pay a portion upfront, then a discounted hourly rate)
• No Upfront (pay nothing initially, then a discounted hourly rate)

4. Optimize your commitment amount:

• Aim for high utilization (98-100%) to ensure you're not paying for unused commitment
• Monitor your coverage to ensure most of your eligible usage is benefiting from Savings Plan rates

For your specific case with three instances running 24/7, I recommend:

• Consider a 3-year term for maximum savings if you're confident in your long-term needs
• Choose All Upfront payment since you mentioned paying for a year in advance
• Start with a commitment that covers your baseline usage (the instances that will definitely run 24/7)
• Regularly monitor your utilization and coverage metrics in AWS Cost Explorer to optimize your commitment

Remember that Savings Plans are applied on an hourly basis, and any unused commitment from one hour does not roll over to subsequent hours.
Sources
Best Practice 18.1 – Understand the payment and commitment options available for Amazon EC2 - SAP Lens
Payment Options Types | AWS re:Post
Optimizing with AWS Savings Plans: Demystifying Utilization and Coverage | AWS re:Post