Mastering GCP CUD for Optimal Cloud Cost Management

Due to business needs, it is apparent that almost every cloud service will face constant competition in terms of cost and attention from the consumers of that cloud service. GCP does offer some relief in the shape of Committed Use Discounts (CUDs) that can help you drastically reduce your cloud expenditures. If you are a cloud developer, a tech hobbyist or the owner of a business, the knowledge of how to benefit from GCP CUDs can, to some extent, help you gain leverage over the competition.

Introduction

The Google Cloud Platform (GCP) is among the most popular platforms for enterprises or small businesses that wish to utilize cloud services. In this arrangement, Committed Use Discounts( CUD’s) serve as an effective tool in cost containment for organizations. This post will cover all the important facets of GCP CUDs including its definition, types, and advantages and how they can be effectively used. At this point, everyone will have an idea of what outcome to expect with GCP CUDs in terms of controlling the use of the cloud resources.

What is GCP CUD?

At its core, a Committed Use Discount (CUD) is a pricing model which seeks to offer heavy discounts for Google Cloud services in return for a commitment to a minimum usage level over a given period. This is a particularly useful model for companies that have stable workloads and are able to determine their resource requirements within all reasonable accuracy.

In contrast to conventional on demand pricing that allows customers to use only the resources they want and pay for without any commitments to such plans, CUDs impose an obligation either to a certain amount of resource usage or a minimum expenditure for one or three years. These obligations not only enhance the organizational resource planning processes but also fast-track the organizations’ resource weighing processes on the cloud.

Opting for a CUD has clearly its cost advantages for businesses meaning such an option is likely to be attractive for those courageously attempting to stick to budget cutbacks while maximizing Google Cloud's benefits and features. Furthermore this model assists the companies in a better organized cloud strategy by limiting lack of resources when companies need to invest in their growth and innovative works.

Types of Google Cloud Platform CUDs

1. Spend-Based CUDs

Offering discounts across a range of eligible services rendered by the Google Cloud service including Google Cloud Run, Cloud Spanner, Cloud SQL, Compute Engine, Google Cloud VMware Engine, and Google Kubernetes Engine (GKE), Memorystore and Cloud Cloud Datastore. This CUD type becomes very useful in the context of businesses that have a very predictable usage of cloud services across several offerings or categories.

Eligible Services:

• Compute Engine

• Google Kubernetes Engine (GKE)

• Cloud Run

• Cloud Spanner

• Cloud SQL

• Google Cloud VMware Engine

• Memorystore

Discount Example:

• 17% off for Cloud Run with a one-year commitment

• Up to 52% off for Cloud SQL with a three-year commitment

The spend-based CUD usage is charged and billed in US dollars/hour, every month. The Cloud Billing Account that makes the purchases of the The cloud spend-based CUDs may also give a discount on the different projects under the account. Any deployment that goes beyond the threshold appears as the full on-demand rate.

Your usage of Compute Engine will not be limited to a particular region, particular machine type and so on. After the purchase of the commitment, it can not be deleted, although support for Cloud billing can help if it was done by accident. You will not be affected by future changes in pricing for your contract until the end of your commitment. Applications must be submitted within an hour of the purchase of the application.

2. Resource-Based CUDs

Resource-based CUDs seek to undertake resource commitment for a certain amount and for a certain area and project. Such a type of CUD is suitable for companies with a constant level of resources regime.

Eligible Resources:

• vCPUs, Memory

• GPUs, Local SSDs

• Sole-tenant nodes

• OS licenses

Discount Example/Use Cases: Best suited for workload patterns whose resource consumption is normal at all times. You can obtain up to 55% savings for a 3-year term or 37% of a one year commitment specifically for the GCP ComputeEngine service. This particular savings also pertains to vCPUs, memory, local SSD and GPUs usages purchased on the same project but for different instance family types but within the same region and zone. It has to be noted that the purchase is linked to a certain project and cannot be a general one under a Cloud Billing Account. On the other hand, you can allow discount-sharing for the purpose of applying them in any projects that fall under the same Cloud Billing account. Also, for future price changes of the contract that will not apply until the commitment has ended including when it is renewed.

3. Flexible CUDs

This form of CUD provides the highest level of freedom since the commitment can be shared across different services and geographic areas, They extend discounts for a commitment that ranges between 1-3 years.

Eligible Services:

• Compute Engine

• Google Kubernetes Engine

• Cloud Run

Discount Example:

• Enjoy flat-rate and predictable discounts as low as 28% for 1-year commitments. 

• Save up to 55% with 3-year commitments.

These discounts apply for different projects, VM sizes, tenancies as long as they are within the same Cloud Billing Account and in all regions. Discounts commence from 1 hour after purchasing and work to respond to fluctuations in workload needs while still making use of Committed Use Discounts. For the time being, these are applied to the majority of General Purpose and Compute Optimized VM usage on GCP.

Please note there is a reservation style usage of reservations with the focus of usage rather than capacity alone; separate reservations are designed for capacity assurance. Any eligible usage which falls within the terms of the reservation will automatically be subject to Committed Use Discounts. These discounts can be purchased by any of the billing accounts, and it will be instituted on any eligible usage from the majority of the projects being billed to that account.

You are reminded that upon acquiring Flexible CUDs, no questions regarding refund and exchange will be entertained. Changes to the price afterwards will not affect your known cost during the life of the contract. In case, the user consumes the space that is less than the allocated capacity, then the user will still pay the committed rate. Resource based CUDs can be used in conjunction with Flexible CUDs since the spend based CUD will be utilized first. Normal rate will be applicable to any such usage where the three variant GCP CUDs are not applicable.

How GCP CUD Works

Commitment Terms

GCP provides two main CUD commitment terms one year and three years. The length of time one commits will very much determine the amount of discount available. For instance, a 3-year period is always better than a one-year period because it generally attracts higher discounts.

Eligible Services:

• Compute Engine

• Cloud SQL

• Google Kubernetes Engine

• Cloud Run 

Discount Calculation: Discount is against the usage or spend amount that has been committed and is capped for certain resources by rates that are on offer.

GCP CUDs can pose specific limits in usage of resources as accounted for which suite workloads with high levels of predictability with little chances for significant shifts within the time frame of the commitment one or three years. If actual usage is surpassing this limit, then GCP will apply its usual overrunning charges which are described because it exceeds the limits that had been set below provisions.

GCP bills you every month for related services and unlike AWS Reserved Instance or Azure Reserved VM instances, you cannot pay all or partly pay before usage or subscription. Still, you are able to realize savings of over 55% cloud costs off the normal rates of many GCP services. This means that no cash is being locked up in commitments or upfront payments.

Benefits of Using GCP CUD

Cost Savings and Budgeting Predictability

Businesses have a way to cut down operational cloud costs by committing themselves to a fixed level of resource utilization or fixed cost. This predictability also assists in allocation of expenditure making it a further improvement in financial management.

Enhanced Resource Planning and Allocation

Use of CUDs ensures that better resource management is adopted within an organization. Due to the predictability of cost, proper decision making pertaining to resource provisioning and scaling can be attained.

Long-term Financial Benefits for Businesses 

CUDs generate savings that when viewed over a period of 3 to 5 years would reasonably lead to significant benefits. This is more useful for organizations that have repetitive and predictable cloud usage.

How to Purchase GCP CUD

Step-by-Step Guide

1. Access the Google Cloud Console: Sign in to your Google Cloud account and navigate to the Billing section.

2. Select Committed Use Discounts: Choose the type of CUD you want to purchase (Spend-Based, Resource-Based, or Flexible).

3. Enter Commitment Details: Specify the service, commitment term, and hourly commitment amount.

4. Review and Purchase: Verify the details and complete the purchase.

Billing Process

Once a purchase is completed, the commitment becomes effective within an hour from the moment of creation. In other words, you can start using the benefits of the purchase right away. These discounts will be automatically reflected in the eligible usage in the selected countries and projects which enables seamless transition into existing processes. It must be understood that these discounts are offered only for the qualifying services therefore be sure to check the terms for your own benefit.

Considerations Before Committing to CUD

Assessing Usage Patterns and Forecasting Needs

Before executing a CUD, you must first study your usage patterns and estimate how much CUD you may need in the future. This is to avoid the situations where one commits an amount that will be disproportionate to their consumption.

Evaluating Commitment Terms and Conditions

Recognize the conditions that go with that type of commitment notice. Commitment notice is usually in years and take note of the penalties for under use.

Risks of Overcommitting and Potential Penalties

Overcommitting results in paying a lot more than actual use of resources, especially those that are not usable at all. Risks have to be evaluated and we recommend that in such situations, start with smaller commitments if there is hopelessness about the future usage.

Case Studies and Examples

Real-World Examples of Businesses Using GCP CUD

• ETSY: Etsy's engineers and data scientists have increased the number of their experiments, there is a particular increase in AI and data analytics. Their move to Google Cloud has reduced their carbon footprint from the cloud and saved over 50% in compute energy. In terms of efforts to leverage CUDs, they were able to decrease the total cost of computed costs incurred from CUDs by 42 % and achieved better cost predictability. Employees completed a cumulative of 1,050 Meets for the day, sent 24.5 million emails, and shared almost 600,000 files, displaying the disposition of Etsy towards community and efficiency with Google Cloud.

• BBM: Relying on Flexible Committed Use Discounts (CUDs), BBM managed to achieve 50% off the price of some projects held with optimal cost and flexibility of use. Today with Google Cloud they have large virtual machines deployment as opposed to increasing the number of nodes and operational overheads. Creative Media Works has reduced the number of core messaging virtual machine instances from 5000 to 3500 on Google Cloud Platform while the development of media storage pay-per-use resources has also taken place. They have also moved logging to Cloud Pub/Sub, Cloud Dataflow, big data to Dataproc, BigQuery, and consolidated database instances to Cloud SQL taking advantage of Google’s subsidized pricing of vCPUs and memory.

Conclusion

If you want to save money on the GCP AI Services, analyze your use and apply for GCP Committed Use Discounts. Since there exist different types of CUDs that serve distinct purposes, an organization can make well-informed decisions on the utilization of the CUDs for potential cost savings. If you are a cloud software developer, a technology enthusiast or a business founder, it is prudent to consider GCP CUD for purposes of cost control to increase operational effectiveness of the business.

Additional Resources

If you are looking to explore more:

• Official GCP Documentation

• Cloud Cost Management Tools

Join Pump for Free

If you found this post interesting, consider checking out Pump, which can save you up to 60% off AWS for early-stage startups, and it’s completely free (yes, that's right!). Pump has tailor-made solutions to take you in control of all your cloud spending effectively. So, are you ready to take charge of cloud expenses and maximize the most from your investment in GCP? Learn more here.