AWS Knowledge
Google Committed Use Discounts: When to Use Them
Piyush Kalra
Jan 13, 2025
Cloud computing can be very costly to both private and public companies. That is why it is critical to monitor these costs. Committed Use Discounts from Google Cloud provide an excellent opportunity to cut costs – saving up to 70% is impressive, but the key is to understand when, how, and why they need to be used.
This blog will provide it all: what CUDs truly are, their advantages, how to know if they are fit for you, as well as how to begin fully implementing them into your work. We will look at how CUDs can help your business reduce cloud spending significantly, from analyzing your workloads to CUD execution.
What Are Google Committed Use Discounts?
CUDs stands for Committed Use Discounts, a cost-saving tool companies can use for specific Google Cloud resources or spending a defined amount over one or three years. The idea is that the company would pay a defined amount during the agreed-upon time, and Google would provide bulk buy discounts think of it as locking.
There are two different types of CUDs available on GCP:
Resource-Based CUDs (Standard CUDs)
Spend-Based CUDs (Flexible CUDs)
How it compares to other pricing models:
Pay-as-you-go: You pay for what you use, which is super flexible, but it’s hard to predict how much you’ll spend.
Sustained Use Discounts: You get automatic discounts if you use a service consistently during the month, but the savings aren’t as significant as what you’d get with CUDs.
Benefits of Using CUDs
If appropriately implemented, CUDs are beneficial for companies that want to reduce costs while having a relatively steady outflow of money:
Significant Cost Savings: Save up to 70% compared to standard on-demand pricing, allowing you to allocate your budget more efficiently.
Simplified Budgeting: Financial planning gets eased with fixed pricing as it becomes more predictable and straightforward. This proactively reduces any unexpected costs.
Enhanced Flexibility: Spend-based CUDs allow you to spend resources across projects, regions, and even instance types, therefore providing you supreme freedom without needing to focus on a single use case.
Adaptable Commitment Options: Regarding your business goals and resource needs, you can select a term of 1-year or 3-year.
Common Misconceptions About CUDs
Misjudging commitment policies often prevent businesses from exploring the benefits of CUDs. Let's address a few misconceptions:
- “CUDs are for large enterprises only.”
Not true! Startups and SMBs with predictable workloads can benefit immensely from 1-year CUDs.
- “You’re locked into inflexible contracts.”
Spend-based CUDs offer flexibility across regions and instance families, making them suitable for varying workloads.
- “Unused commitments are canceled or refunded.”
Unused commitments are not reimbursed, underscoring the importance of accurate forecasting and analysis.
When Should You Consider Committing to a CUD?
The suitability of CUDs in comparison to other pricing models depends on how your workload patterns match with those of CUD contracts. Consider committing when:
You Have Steady-State Workloads: CUDs work wonderfully when your utilizations are predictable, like in production settings or in the case of regularly scheduled batch processes.
Your Long-Term Strategy Supports Growth: You expect maintaining or growing cloud requirements, CUDs will greatly reduce the costs incurred over a one or three-year term.
You Need Budget Predictability: Locking in the costs removes the budgetary constraints of adjusting for the volatility associated with the pay-as-you-go model.
Types of Committed Use Discounts
To pick the right CUD for your needs, it’s important to know the two different types:
Resource-Based CUDs (Standard CUDs): Perfect for consistent, predictable workloads. Discounts apply to specific resources you commit to, such as virtual CPUs (vCPUs) or memory tied to a region and machine family. For example, if you’re running a web app that requires a fixed amount of compute resources (like vCPUs, GPUs, or memory) in a specific region, this option can save you up to 55%. It’s tied to a certain project, region, or instance type, making it ideal for stability and steady usage.
Spend-Based CUDs (Flexible CUDs): Great for workloads that are harder to predict. Offers flexibility by allowing discounts on spend across multiple services like Compute Engine resource, Google Kubernetes Engine, and Cloud SQL. Let’s say your company runs different apps in multiple regions, and the resource needs fluctuate. Flexible CUDs let you save up to 46% across various services and locations as long as they fall under the same billing account. It’s all about giving you more freedom.
Comparing Committed Use Discounts and Sustained Use Discounts
To optimize costs, it's vital to assess how CUDs differ from SUDs:
FeatureCUDs (Committed Use Discounts)SUDs (Sustained Use Discounts)Commitment RequiredYes (1- to 3-year contracts)NoApplicabilityManually purchased for fixed resourcesAutomatic for >25% resource usage/monthDiscount PotentialUp to 70%Up to 30%FlexibilityLowHighBest forPredictable, stable workloadsFluctuating workloads
How to Evaluate Your Resource Usage
Whether you are allocating time or workforce resources, it’s always best to check their trends beforehand to make sure your decisions are optimal.
Google CUDs Analysis Dashboard: With this tool, you can analyze your historical data in order to recommend the best Committed Use Discounts to save you money without the fear of wasting money by over-committing.
Internal Workload Profiling: Divide your workload into steady-state (the constant use of resources over the given period) and variable components. This approach also makes it easy to pick the appropriate CUD type for each workload.
Step-by-Step Guide to Purchasing CUDs
Here’s how to set up committed use discounts for your organization:
Open Google Cloud Console: Go to the “Billing” and then "Committed Use Discounts" section.
Pick a Type: Choose Resource-Based or Spend-Based discounts depending on your needs.
Select a Term: Choose between a 1-year commitment for flexibility or 3 years long-term commitment for bigger savings.
Set Your Commitment: Enter how many resources (like vCPUs or memory) or spending you want to commit to.
Activate Discounts: Once you buy, the discounts apply automatically to your usage.
Maximizing Your Savings with CUDs
After you have purchased CUDs, these are the ways you can maximize the value:
Combine with SUDs: Extra cost savings will ensure that you are utilizing CUD and SUD in tandem. If Sustained Use discounts are not being used on CUD workloads, then none of your approaches will be beneficial.
Enable Discount Sharing: With incrementing purchase power, it's wise to set up sharing of the discounts over projects to like billing accounts-the unused CUD commitments will not go further to waste.
Leverage Spend Flexibility: Optimizing your CUD means taking full advantage of CUDs. It is possible to spend across various services with the Spend Load CUD, so it is advisable not to let resources mix to ensure there are lower utilization levels in the expenses.
Regularly Review Usage: Conducting an audit or review on a quarterly basis will help you determine the areas you can further optimize.
Conclusion
Google Committed Use Discounts will change the game for everyone, from startups to enterprises. Carefully analyzing your resource needs, picking the right type of CUDs, and closely observing your usage over a period allow you to save money and enjoy the flexibility and scalability Google Cloud Platform has to offer.
Want to learn more? Sign up for Google Cloud services today and explore committed use discounts tailored to your business needs.
FAQs About Google CUDs
1. Can I cancel CUDs if my needs change?
CUDs cannot be canceled mid-term, so forecasting is essential. However, you can enable auto-renewal or split/merge contracts to adjust commitments.
2. What happens if I exceed my committed resources?
Overages are charged at on-demand rates, so be careful not to underestimate your commitments.
3. Which services are eligible for Spend-Based CUDs?
Cloud Run, Bigtable, Dataflow, Kubernetes Engine, and more are eligible. For complete coverage, refer to Google's documentation.
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