Committed use discounts (CUDs) for Compute Engine

This document explains 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 compute 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 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 commit to purchasing a specific type and amount of Compute Engine resources with a commitment plan of either 1 year or 3 years. In return, you receive those resources at discounted prices. A 3-year plan offers a higher discount rate than a 1-year plan. 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 series and a discount of up to 55% for all other machine series.

  • 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
    • Up to 20% for Red Hat Enterprise Linux (RHEL) 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

This section explains how Compute flexible CUDs apply to Compute Engine both before and after you opt in to the new model. Check the information that's relevant to your Cloud Billing account's model.

Compute flexible CUDs add flexibility to your Google Cloud spending capabilities by providing discounts for your spend across Compute Engine, GKE, and Cloud Run. Specifically for Compute Engine, flexible CUDs eliminate the need to restrict your commitments to a single project, region, or machine series. With a flexible commitment, you can receive applicable CUDs on eligible Compute Engine spend across the commitment's Cloud Billing account, regardless of the project or region where you use your Compute Engine resources.

To learn about how flexible CUDs apply to the other services, see the following documents:

Eligible resources

For Compute Engine, only memory, vCPUs, and Local SSD disks that are used with the following machine series are the eligible resources:

  • General purpose: C3, C3D, C4, C4A, C4D, E2, N1, N2, N2D, and N4 machine series
  • Compute-optimized:
    • H3 machine series (Available only after opting in to the new model)
    • C2 and C2D machine series
  • Memory-optimized: M1, M2, M3, and M4 machine series (Available only after opting in to the new model)
  • Storage-optimized: Z3 machine series

For every listed machine series, the resource eligibility applies to all available machine types and sole-tenant node types. For sole-tenant nodes, the resulting sole-tenancy premium is also eligible for flexible CUDs.

To enjoy the expanded scope of flexible CUDs and get discounts for M1, M2, M3, M4, and H3 machine series, you must opt in to the new spend-based CUD model from your Cloud Billing account. Opting in is a one-time action and you don't need to opt in separately for each machine series.

To view the full list of SKUs that are eligible for flexible CUDs, see one of the following documents:

Applicable discounts

Depending on your commitment's term and your Cloud Billing account's CUD model, you receive the following flexible CUDs for your resources and services:

Service Spend eligible on Available before or after opting into the new model? 1-year CUDs 3-year CUDs
Compute Engine M1, M2, M3, and M4 machine series Only after opting in No discounts 62%
H3 machine series Only after opting in 17% 17%
C2, C2D, C3, C3D, C4, C4A, C4D, E2, N1, N2, N2D, and N4 machine series Both 28% 46%
Local SSD disks Both 28% 46%
Sole-tenancy premium Both 28% 46%
GKE GKE Standard and GKE Autopilot Both 28% 46%
Cloud Run Cloud Run services with request-based billing Only after opting in 17% 17%
Cloud Run functions Only after opting in 17% 17%
Cloud Run services with instance-based billing, Cloud Run jobs, and Cloud Run worker pools Both 28% 46%

How flexible commitments work

The manner in which you receive CUDs for your flexible commitments is different between the legacy model and the new, opt-in model, as follows:

After opting in

Commitment fee

You purchase compute flexible commitments for your Cloud Billing account for either a one or three-year term. For the duration of the commitment's term, you commit to spending a minimum hourly amount on eligible resources and services. This amount becomes your hourly commitment fee, which you pay for the entire duration of the term, regardless of your actual usage.

Commitment activation

Your commitment becomes active shortly after purchase and you start getting charged the commitment fee. The exact activation time depends on when you purchased the commitment within the hour, as follows:

  • Purchased during minute 49 or earlier of a specific hour: The commitment becomes active at the start of the next hour. For example, if you purchase the commitment between 7:00 PM and 7:49 PM in your timezone, then your commitment becomes active at 8:00 PM in that timezone.
  • Purchased during minute 50 or later of a specific hour: The commitment becomes active at the start of the hour after the next one. For example, if you purchase the commitment between 7:50 PM and 7:59 PM in your timezone, then your commitment becomes active at 9:00 PM in your timezone.

Application of eligible CUDs

After your commitment becomes active, you start receiving eligible resources and services at discounted prices. Unlike the legacy model that provides hourly credits, this new model applies the discounts directly to the prices of all eligible resources and services. Discounted prices for all eligible SKUs are determined by the CUD consumption model rates.

Every hour, until your total spend on eligible SKUs equals the commitment fee, the following things happen:

  • SKUs for eligible usage are charged at the discounted prices determined by the CUD consumption model rates.

    • The Compute flexible CUD 1-year consumption model ID is D97B-0795-975B.
    • The Compute flexible CUD 3-year consumption model ID is 70D7-D1AB-12A4.

  • Your commitment fee offsets these discounted usage costs.

In summary, the fundamental difference between the models is as follows:

  • After opting in: You commit to an hourly spend that is based on the discounted resource costs.
  • Before opting in: You committed to an hourly spend that is based on the on-demand resource costs.

The moment your total hourly spend crosses the value of the commitment fee, usage is considered "overage" and is charged at applicable on-demand rates.

Usage costs on your cost data exports

For resource usage that is covered by your commitment, the resource costs appear on your cost data exports in the following way:

  • In the SKU column, you see the on-demand SKU name for the resource.
  • In the Effective price column, you see the discounted price of that SKU.
  • In the Consumption model column, you see one of these values, depending on your commitment's term: Compute Flexible CUDs - 1 Year or Compute Flexible CUDs - 3 Year.

Your hourly commitment fee appears as a charge on the cost data exports in the following way:

  • In the SKU column, you see the value Commitment Fee SKU.
  • In the cost column, you see the hourly commitment fee value.
  • In the Credits column, you see the resource usage costs that were covered by your commitment fee. This credit offsets your commitment fee for the used portion of your commitment. When your commitment is fully utilized, the credit matches the commitment fee.

Any overage usage appears on your cost data exports in the following way:

  • In the SKU column, you see the on-demand SKU name for your resource.
  • In the Effective price column, you see the on-demand price of that SKU.
  • In the Consumption model column, you see Default as the value.

For detailed information about your cost data exports and how to interpret charges, see Spend-based CUDs data model updates.

Before opting in

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 either 28% or 46% CUDs on that minimum hourly spend amount.

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 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 spans across Compute Engine, 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, N2D, and C2 machine series, and are located in the us-central1 and us-east1 regions. The following examples explain how you receive flexible CUDs for this commitment based on your Cloud Billing account's model:

After opting in

Suppose you purchase a compute flexible commitment for this Cloud Billing account and commit to a US$100 per hour spend for a 3-year term. The following points explain how this example flexible commitment works:

  • You commit to a US$100 hourly spend. This amount becomes your hourly commitment fee. Because you chose a 3-year term, you receive eligible N2, N2D, and C2 resources at a 46% discount off on-demand prices.
  • Every hour during your commitment's duration, your commitment fee covers up to US$100 worth of your discounted N2, N2D, and C2 usage costs.
  • You get discounted prices for your hourly usage on vCPUs, memory, or Local SSD disks from any N2, N2D, and C2 instances across us-central1 and us-east1 regions, until you fully use your commitment.
  • Essentially, your commitment fee can cover eligible N2, N2D, and C2 resources that are worth an on-demand price of up to US$185.19 per hour (US$100 / (1 - 0.46)).
  • If you use hourly resources with an on-demand price of US$50, then the discounted cost of these resources is US$27 (US$50 * (1 - 0.46)). This usage is covered by your commitment fee. You still pay the US$100 fee, and the unused portion of your commitment (US$73) is not rolled over.
  • If you use hourly resources with an on-demand price of US$200, then the first US$185.19 of usage is covered by your commitment. The discounted cost is US$100, which is offset by your commitment fee. The remaining US$14.81 of usage is considered overage and is billed at on-demand rates. Your total hourly cost is US$100 (commitment amount) + US$14.81 (overage) = US$114.81.

Before opting in

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 a combination of Compute Engine vCPUs, memory, and Local SSD disks, whose on-demand prices are worth US$100. The US$100 amount becomes your hourly committed spend amount for the commitment term.

  • During your commitment's duration, your spend of up to US$100 per hour on vCPUs, memory, or Local SSD disks from any N2, N2D, and C2 instances and across us-central1 and us-east1 regions counts towards this minimum spend. The cost of these resources counts towards the minimum spend as long as these resources aren't already covered by another commitment. Your spend can belong to any project within the commitment's Cloud Billing account.

  • You receive a 46% CUD on the US$100 and are charged an hourly commitment fee of US$54. With this discount, you can effectively use up to US$100 worth of Compute Engine vCPUs, memory, and Local SSD disks 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.

Spend 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 term. Suppose that your usage spans the following resources and services:

  • Compute Engine: N2 machine series vCPUs and memory
  • GKE: Google Kubernetes Engine (GKE) Standard edition
  • Cloud Run: Cloud Run services with instance-based billing

The following examples explain how you receive flexible CUDs for this commitment based on your Cloud Billing account's model:

After opting in

In return for your commitment, you receive a 46% discount off on-demand prices for your eligible usage across Compute Engine, GKE, and Cloud Run. Your US$100/hour commitment fee covers eligible usage with an on-demand price of up to US$185.19 per hour (US$100 / (1 - 0.46)).

Now suppose that during a given hour, your resource usage is equivalent to the following on-demand spend:

  • Compute Engine: US$200 on N2 vCPUs and memory
  • GKE: US$100 on Google Kubernetes Engine (GKE) Standard edition
  • Cloud Run: US$100 on Cloud Run services with instance-based billing

Without the commitment, your total on-demand spend would have been US$400. The commitment covers US$185.19 of this spend. To distribute the discount, Google Cloud uses the ratio of eligible spend across the three services (2:1:1). The covered on-demand spend is distributed as follows:

  • Compute Engine: US$92.60 (which is half of US$185.19)
  • GKE: US$46.30 (which is a quarter of US$185.19)
  • Cloud Run: US$46.30 (which is a quarter of US$185.19)

The discounted cost for this covered usage is US$100, which is paid for by your commitment fee. The remaining usage is considered overage and is billed at on-demand rates, which is as follows:

  • Compute Engine: US$107.40 (US$200 - US$92.60)
  • GKE: US$53.70 (US$100 - US$46.30)
  • Cloud Run: US$53.70 (US$100 - US$46.30)

Your total hourly cost is US$100 (commitment fee) + US$214.80 (total overage) = US$314.80.

Before opting in

In return for your commitment, 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 flexible commitments

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 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, Cloud Composer 1, or Vertex AI.
  • Compute flexible CUDs are available only for Compute Engine, Google Kubernetes Engine, and Cloud Run. For the full list of eligible SKUs, see Compute flexible CUD eligible SKUs.
  • Committed use discounts aren't available for your reserved resources if you use your Compute Engine reservations with Dataflow or Dataproc Serverless.
  • You can purchase compute flexible commitments only at a Cloud Billing account level.
  • For Compute Engine, you can't purchase flexible commitments for GPUs. Only memory, vCPUs, and Local SSD resources are eligible for compute flexible CUDs. If you use these resources with any sole-tenant nodes, then the resulting sole-tenancy premium is also eligible.
  • You can't use your compute flexible commitments for Spot VMs or preemptible VMs.
  • For memory-optimized VMs, flexible CUDs are available only for 3-year commitments. If you purchase a 1-year flexible commitment, then you don't receive any discounts for your spend on memory-optimized VMs.

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