Committed use discounts (CUDs) for Compute Engine

This document explains about Google Cloud's committed use discounts (CUDs) and the types of CUDs that you can receive for Compute Engine.

Google Cloud offers CUDs in return for purchasing committed use contracts (also known as commitments). When you purchase a commitment, you commit either to a minimum amount of resource usage or to a minimum spend amount for a specified term duration of one or three years.

For Compute Engine, you receive deeply discounted prices for your VM instances in return for your 1-year or 3-year commitments. Depending on your resource usage requirements, you can receive CUDs for Compute Engine resources in one of the following ways:

  • Resource-based committed use discounts (or resource-based CUDs) are CUDs that you receive when you purchase a resource-based commitment and commit to use a minimum amount of Compute Engine resources in a particular region and a project. These CUDs are ideal for predictable and steady state resource usage.

  • Compute flexible committed use discounts (or flexible CUDs) are spend-based CUDs that you receive when you purchase a Compute flexible commitment and commit to a minimum amount of hourly spend on eligible services and resources. These CUDs are ideal for scenarios where you have more predictable Google Cloud spend needs across one or more of the following services:

    • Compute Engine
    • Google Kubernetes Engine
    • Cloud Run

The following sections of this document explain about these CUD types, their key differences, and how you receive these CUDs for your Compute Engine resources.

Resource-based CUDs

Resource-based commitments are ideal for predictable and steady state usage.

These commitments provide a discount in exchange for your commitment to purchase a minimum amount of Compute Engine resources. When you purchase a resource-based commitment, you purchase a specific amount of Compute Engine resources at a discounted price and commit to paying for those resources for a term of either 1 year or 3 years. Each resource-based commitment is specific to the region and project in which you purchase that commitment. This means that you can use any given commitment to cover resources only in the specified region and project.

Eligible resources

Resource-based commitments are available for the following resources:

  • vCPUs
  • Memory
  • GPUs
  • Local SSD disks
  • Sole-tenant nodes
  • Operating system (OS) licenses.

Types of resource-based commitments

You can purchase the following categories of resource-based commitments:

  • Hardware commitments: You can purchase hardware commitments for resources like vCPUs, memory, GPUs, local SSDs, and sole-tenant nodes. You get a discount of up to 70% for memory-optimized machine types and a discount of up to 55% for all other machine types.

  • Software license commitments: You can purchase license commitments for applicable premium operating system (OS) licenses. You get the following discounts in return:

    • Up to 79% for SUSE Linux Enterprise Server (SLES) images
    • Up to 63% for SLES for SAP images

Resource-based commitments for hardware resources are separate from the ones for licenses. You can purchase both categories of commitments for the same VM instance, but you cannot purchase a single resource-based commitment that covers both hardware resources and licenses.

When you purchase a resource-based commitment, the commitment becomes active on the following day at 12 AM US and Canadian Pacific Time (UTC-8, or UTC-7 during daylight saving time). You are billed monthly for your committed resources until the end of your commitment term, regardless of whether or not you use those resources. You can't cancel a commitment after its purchase.

Learn more and purchase

To learn more about resource-based CUDs for Compute Engine, see Resource-based committed use discounts.

For purchase information, see one of the following depending on your use case:

Compute flexible CUDs

Compute flexible CUDs add flexibility to your Google Cloud spending capabilities by providing discounts for your spend across Compute Engine, GKE, or Cloud Run.

Specifically for Compute Engine, flexible CUDs eliminate the need to restrict your commitments to a single project, region, or machine series. You can receive CUDs for your vCPU and memory usage in any of the projects within your Cloud Billing account, across any region, and belonging to any eligible machine types.

Eligible resources

For Compute Engine, only memory and vCPUs of the following machine types are eligible for flexible CUDs:

  • General purpose:

    • All C3, C3D, E2, N1, N2, C4 (Preview), N2D, and N4 machine types
    • All N2 and N2D sole-tenant node types

  • Compute-optimized: All C2 and C2D machine types

  • Storage-optimized: All Z3 machine types

To view the full list of Compute Engine SKUs that are eligible for flexible CUDs, see Compute flexible CUDs eligible SKUs.

How flexible commitments work

You purchase flexible commitments for your Cloud Billing account and commit to a minimum hourly spend amount across these products for a 1-year or 3-year term duration. Specifically, you commit to spend on eligible resources or services that are worth a specified minimum amount of on-demand price, per hour, throughout the commitment's term. Depending on your commitment's term, you receive the following CUDs on that minimum hourly spend amount:

  • A 28% discount over your committed hourly spend amount for a 1-year commitment
  • A 46% discount over your committed hourly spend amount for a 3-year commitment

Your commitment becomes active within the first hour of its purchase. This discounted committed spend amount becomes your hourly commitment fee. In return, you receive hourly credits on your Cloud Billing account that are worth your total committed spend amount. Google Cloud uses these credits to offset your hourly spend on usage that is eligible for flexible CUDs. At the end of each month, Google Cloud calculates your total commitment fee for that month and bills you that amount.

If you use any additional resources that take your hourly spend amount beyond your committed hourly spend amount, then the spend amount for the overage usage is not covered by the credits you receive from flexible CUDs. The overage usage is charged at the on-demand rate and might be eligible for any applicable sustained use discounts (SUDs). Compute Engine automatically applies SUDs to your eligible usage.

Your hourly commitment fee remains your minimum hourly expenditure throughout the commitment term and you have to pay it even if you don't use resources whose on-demand prices total up to your committed hourly spend. Your commitment fee remains the same even if the on-demand prices for your resources change during your commitment term.

Examples of flexible commitments

The following examples show how you receive Compute flexible CUDs based on whether your eligible Google Cloud spend is limited to Compute Engine, or also spans across GKE and Cloud Run.

Spend limited to Compute Engine

Consider a scenario where your eligible Google Cloud spend is limited to Compute Engine. Suppose that your Cloud Billing account has multiple projects with VM instances that belong to N2, E2, and C2 machine series, and are located in the us-central1 and us-east1 regions. Suppose you purchase a Compute flexible commitment for this Cloud Billing account and commit to spend on resources whose on-demand prices are worth US$100, per hour, for a 3-year term. The following points explain how this example flexible commitment works:

  • You commit to spend a minimum hourly amount on Compute Engine vCPUs, memory, or both whose on-demand prices are worth US$100. The US$100 amount becomes your hourly committed spend amount for the commitment term.
  • When you use vCPUs, memory, or both from any N2, E2, and C2 machine types across us-central1 and us-east1 regions, regardless of the project, the cost of those resources, up to US$100, counts towards this minimum spend, provided they aren't already covered by another commitment.
  • You receive a 46% CUD on the US$100 and are charged an hourly commitment fee of US$54. This discount lets you use up to US$100 worth of Compute Engine vCPUs, memory, or both for US$54, every hour, throughout your commitment term.
  • If you purchase this flexible commitment but use hourly resources whose on-demand prices are worth only US$50, then your commitment covers these US$50 worth of resources, but you must still continue to pay the hourly commitment fee of US$54.
  • If you purchase this flexible commitment but use hourly resources whose on-demand prices are worth US$150, then the commitment covers US$100 worth of resources and you pay US$54 per hour for these US$100 worth of resources. You pay the full US$50 per hour for the remaining US$50 worth of resources. These remaining US$50 worth of resources are eligible for SUDs.
  • Consider the scenario where you purchase this flexible commitment and use hourly resources whose on-demand prices are worth only US$50. During your commitment period, if the on-demand cost for your purchased resources changes from US$50 to US$150, your hourly commitment fee still remains US$54 and your flexible commitment continues to cover US$100 of your spend. However, you must pay the remaining US$50 per hour of on-demand price in full. You receive any applicable SUDs on this additional US$50 on-demand cost.

Usage beyond Compute Engine

Consider a scenario where your eligible Google Cloud spend spans across Compute Engine, GKE, and Cloud Run.

Suppose that you purchase a Compute flexible commitment for your Cloud Billing account where you commit to spending US$100 per hour on Google Cloud services, on a 3-year commitment. In return, you receive 46% CUDs for this commitment. After discount, you must effectively pay US$54 per hour in return for US$100 worth of on-demand Google Cloud services. Your hourly commitment fee is US$54 and, in return, you receive US$100 of credits per hour that you can use for Compute Engine, GKE, and Cloud Run.

Now suppose that during a given hour of the month, your spend on eligible Google Cloud usage for your Cloud Billing account is as follows:

  • US$200 worth of on-demand spend on Compute Engine
  • US$100 worth of on-demand spend on GKE
  • US$100 worth of on-demand spend on Cloud Run

Google Cloud uses your US$100 worth of credit to cover a portion of this spend. To distribute these credits across the three services, Google Cloud uses the ratio of eligible spend amounts across the three products. In this example, the ratio of eligible spend across Compute Engine, GKE, and Cloud Run is 2:1:1. In return, for that specific hour, Google Cloud distributes your credits of US$100 across these services in the same ratio:

  • Credits worth US$50 are used for Compute Engine
  • Credits worth US$25 are used for GKE
  • Credits worth US$25 are used for Cloud Run

You pay the prevailing on-demand rates for the remaining usage for each product:

  • US$150 for Compute Engine
  • US$75 on GKE
  • US$75 on Cloud Run

Purchase a flexible commitment

You can purchase Compute flexible commitments only at a Cloud Billing account level. For more information about how to purchase a flexible commitment, see Purchasing spend-based commitments.

Before you purchase a commitment, read the Service Specific Terms.

After you purchase a commitment, you can't cancel it. For more information, see Cancelling commitments.

Order of discount application

You can purchase both resource-based and flexible commitments to cover Compute Engine resources for projects within your Cloud Billing account. You can use your resource-based commitments to cover your predictable and stable resource usage that is specific to a project, region, and a machine series. You can use flexible commitments to cover any resource usage that isn't specific to any one machine series, project, or region.

However, the discount types that Google Cloud offers on your Compute Engine resources are mutually exclusive and can't be combined. At any given point, a resource is eligible for only one kind of discount. If you're receiving a specific type of discount for a portion of your resource usage, then that portion of usage doesn't qualify for any other type of discount. If you purchase both resource-based commitments and flexible commitments for your Compute Engine resources, then Google Cloud optimizes the use of your commitments, on an hourly basis, in the following way:

  • Google Cloud first utilizes your resource-based commitments and applies all the resulting resource-based CUDs to any eligible hourly usage.
  • Google Cloud then utilizes your spend-based flexible commitments and applies all the resulting credits to cover the hourly spend applicable to any remaining eligible usage.

After utilizing all of your commitments, Google Cloud uses the on-demand rates to charge any additional hourly usage. This overage hourly usage might be eligible for any applicable SUDs.

Limitations

  • Resource-based and flexible CUDs are available only for resources that are deployed using Compute Engine SKUs, which include VMs that are used by Compute Engine, Google Kubernetes Engine, Dataproc, or Cloud Composer 1.
  • You can purchase Compute Engine flexible commitments only at a Cloud Billing account level.
  • You can purchase Compute Engine flexible commitments only for your Compute Engine vCPUs, memory, or both. You can't purchase these commitments for GPUs or local SSDs.
  • You can't use your Compute Engine flexible commitments for Spot VMs or preemptible VMs.

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