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When it comes to managing cloud costs, Google Cloud Platform’s pricing models can seem a bit complex. GCP offers two strategic pricing models to help with this: Committed Use Discounts (GCP CUD) and Sustained Use Discounts (GCP SUD). Each model can accommodate different types of cloud usage and budgetary constraints. In this article, we’ll dive into the specifics of each pricing model and draw up a comparative analysis of GCP CUD vs SUD.

What are Committed Use Discounts in Google Cloud Platform (GCP CUD)?

Google Cloud Platform’s Committed Use Discounts (GCP CUD) are ideal for businesses willing to commit to using cloud resources for a long term, ideally for a one to three years. This commitment can result in substantial savings, especially for long-term, high-volume projects. By choosing CUD, businesses can secure specific resources, enabling predictable budgeting and deeper discounts compared to standard on-demand pricing.

GCP CUD vs SUD, GCP SUD. GCP CUD, Google Committed Use Discounts, Google Sustainable Use Discounts, Google Cloud Pricing model
Source: Google Cloud

Beyond cost savings, GCP CUDs offer enhanced financial control and security in planning. They are compatible with various Google Cloud services, including GCP Compute Engine, Google CloudSQL, and Google Kubernetes Engine, making them versatile for different needs. GCP CUDs are particularly advantageous for companies with stable and predictable compute demands. This streamlined approach frees up IT resources to focus on more strategic project needs that can drive business growth.

Benefits of GCP Committed Use Discounts

Google Cloud Platform’s Committed Use Discounts (CUD) offer a range of attractive benefits for businesses looking to better manage their cloud expenses and streamline their budgeting process. Let’s explore some of the major perks:

  • Significant Cost Savings: By committing to use a certain cloud resources for one to three years, businesses can access discounts that may reach up to 70% compared to pay-as-you-go pricing which translates to substantial savings.
  • Predictable Budgeting: CUDs make financial planning smoother and more predictable. With costs set in advance, companies can budget with greater accuracy, avoiding the uncertainty of fluctuating prices. This predictability is essential for stable financial planning.
  • Flexible Commitments: Despite requiring a commitment, CUDs aren’t completely rigid. You can select from various virtual machine types and regions, choosing the resources that fit your specific needs.
  • Streamlined Management: Once you opt into CUDs, much of the GCP cost management is automated. There’s no need for ongoing adjustments or constant monitoring of resource use, which simplifies the administrative workload.
  • Scalable Solutions: For a growing business, the scalability that CUDs offer can be a game changer. They enable you to increase your resource usage while still benefiting from the committed discount, helping you avoid the higher costs that usually come with scaling up on demand.

These features make Google Cloud Platform’s Committed Use Discounts a strategic choice for firms that anticipate consistent cloud usage and are looking for a cost-effective, manageable, and scalable cloud computing solution.

Understanding the Downsides of GCP CUD

While GCP Committed Use Discounts (GCP CUDs) are great for cutting costs and stabilizing budgets, there are a few potential downsides that you should consider before signing on. Here are some of the key limitations associated with CUDs:

  • Long-term Commitment: The biggest catch with CUDs is that they require you to commit to using specific resources for one to three years. This long-term commitment can be a bit of a bind for businesses in dynamic industries or those experiencing fluctuating demand, where flexibility is key.
  • Complexity in Management: Handling CUDs can get complicated for larger organizations with diverse needs across different projects or departments. It demands meticulous planning and continuous tracking to ensure that your commitments align well with your actual usage.
  • Overcommitment Risks: There’s always a risk that you might commit more than what you actually need. Changes in business strategies, economic shifts, or technological advances could make your commitments less beneficial than planned, potentially leading to wasted investments.
  • Geographic Limitations: GCP CUDs sometimes come with geographical constraints, meaning the discounts are only valid for resources used in certain regions. This can be limiting for businesses needing to operate globally or wanting the flexibility to shift resources across regions.
  • Need for Upfront Planning: To really benefit from CUDs, you need to do a lot of upfront planning. Accurately predicting your future cloud needs can be challenging and requires a solid understanding of your business’s growth trajectory and cloud usage patterns.

Despite these potential limitations, CUDs can still provide substantial benefits for organizations with stable and predictable cloud usage. However, it is crucial for businesses to conduct a thorough analysis of their cloud consumption patterns and growth projections before committing to CUDs.

What is the GCP Sustained Use Discount (GCP SUD)?

GCP offers Sustained Use Discounts (GCP SUD) as a smart way for businesses to cut down on their cloud expenses. These discounts are designed to reward you for consistently using certain services over a billing month, such as a GCP Compute Engine. GCP SUDs apply automatically to GCP resources based on your usage, so there’s no need for upfront commitments or long-term contracts. Thus, you don’t have to predict your cloud needs in advance or lock yourself into a long term commitment.

The more you use a particular resource within the month, the greater the discount you receive. For instance, if you use a service for half of the month, you might get a 20% discount. If your usage increases to cover most of the month, the discount rate goes even higher, potentially saving you a substantial amount on your cloud bill. Compute Engine offers a maximum monthly SUD percentage of either 20% or 30% depending on the resource and machine types.

GCP SUD for monthly discounts, Google SUD discounts for compute engine
Source: Google Docs

Advantages of GCP Sustained Use Discounts

GCP SUDs are a smart choice for those with consistent yet variable cloud usage, as they offer cost savings that automatically adjust to your usage levels. Let’s take a closer look at the key advantages of incorporating SUD into your cloud services:

  • Automatic Discounts: The standout feature of GCP SUD is its simplicity. The SUD discounts automatically apply to your resources as you increase your usage. Thus, the more you use, the less you pay per unit, without any need for manual intervention or complicated pricing strategies.
  • No Upfront Commitment: GCP SUDs are ideal for businesses with unpredictable workloads because they come without the requirement of any upfront commitment. This level of flexibility allows companies to enjoy reduced rates without the risk of long-term financial commitments.
  • Perfect for Scaling Operations: If your business is in a growing phase, you’ll find SUDs particularly beneficial. The discount structure is designed to grow with you, offering greater savings as your resource usage increases, which is essential for both startups and expanding businesses.
  • Ease of Budgeting and Cost Management: With SUDs, the pricing adjusts automatically based on how much you use, simplifying the way you manage and forecast costs. This means you can spend less time worrying about cloud costs and more time focusing on what matters—growing your business.
  • Discounts for Partial Usage: Even if you don’t use a service throughout the entire month, you’ll still receive discounts for the time that you do use. This partial month discounting provides flexibility and ensures you get some savings regardless of your usage pattern.

These benefits make GCP SUDs a versatile and economically sound choice for any business looking to optimize cloud costs.

Exploring the Drawbacks of GCP SUD

While Sustained Use Discounts (GCP SUDs) can offer significant savings for continuous usage, they come with certain limitations that might not suit everyone’s needs. Here are some key drawbacks to consider:

  • Limited to Compute Resources: SUDs are primarily applicable to Compute Engine resources, such as virtual machines. This means they do not extend to other Google Cloud services like storage, databases, or BigQuery. If your cloud usage is diverse and extends beyond just compute instances, the benefits of SUDs might be less impactful.
  • Dependency on Continuous Usage: SUDs are designed to reward long-term, continuous usage of resources. The discount increases the longer a VM is used within a billing month. This structure makes SUDs less suitable for workloads that are intermittent or have fluctuating usage patterns, as the discounts won’t be maximized unless the resources are used consistently throughout the month.
  • Predictability of Savings: Because the discounts are based on the amount of usage, it can be challenging to predict the exact savings in advance. This unpredictability can complicate budgeting for organizations that require precise financial forecasts and planning. Businesses might find it difficult to estimate their cloud costs accurately, which could lead to unexpected expenses.
  • Hidden Costs and Resource Inefficiency: These discounts often don’t cover the extra costs associated with maintaining continuous use, such as additional monitoring and management services. These hidden costs can eat into the savings you thought you were getting. Plus, to maximize your discount, you might end up keeping resources running unnecessarily, which is wasteful and increases your carbon footprint.
  • Vendor Lock-In: Another downside is that sustained use discounts can make you more dependent on GCP. Once you’re used to the discounts, switching to another provider becomes more challenging, even if there are better options available. This reduces your flexibility and could mean you’re missing out on better deals elsewhere.

Before committing to SUDs, make sure you weigh the benefits against these potential downsides to ensure it’s the right move for your company.

GCP Committed Use Discounts vs Sustained Use Discounts: How to Choose The Right Savings Strategy

When deciding between Committed Use Discounts and Sustained Use Discounts on Google Cloud, understanding your business’s resource needs is very important. If you consistently need cloud resources, CUDs are your perfect choice. You can commit to a certain amount of resource usage for one or three years and save between 20% and 55%, giving you predictable costs for long-term planning.

For fluctuating workloads or short-term needs, SUDs are more suitable. They apply automatically based on monthly usage, with savings from 5% to 30%, and require no upfront commitment, offering flexibility.

FeatureSustained Use Discounts
(GCP SUD)
Committed Use Discounts
(GCP CUD)
DefinitionDiscounts applied automatically to Compute Engine and Cloud SQL instances based on sustained usage.Discounts provided for committing to use a specific amount of resources for one or three years.
ApplicabilityAvailable for Compute Engine and Cloud SQL services.Applicable to various services including Compute Engine, Cloud SQL, BigQuery, etc.
Discount TypeAutomatic, based on actual usage duration within a month.Pre-purchased, based on a commitment to use a specified amount of resources over a fixed period.
Discount RateIncreases progressively with more sustained usage; up to 30% off for continuous usage throughout the month.Fixed discount rate, up to 55% off depending on the resource type and commitment term.
Usage FlexibilityHighly flexible; no upfront commitment needed, and usage can vary month to month.Requires a commitment to use a specified amount of resources consistently for the commitment term.
Service CommitmentNo long-term commitment; discounts are applied automatically based on monthly usage patterns.Requires a long-term commitment (one or three years) to receive discounted rates.
Billing Cycle ImpactDiscounts are applied within each monthly billing cycle based on usage continuity.Commitment is billed on a regular basis over the term (monthly or upfront payment options available).
Ideal Use CasesSuitable for workloads with unpredictable or varying usage patterns.Best for predictable, steady-state workloads that can commit to consistent usage over a long period.
Cost PredictabilityLower predictability; cost savings vary based on actual usage each month.High predictability; fixed discounts based on the committed amount, leading to stable monthly costs.
Ease of UseNo additional steps required to obtain the discount; it’s automatically applied.Requires upfront commitment and administrative setup to purchase and manage commitments.
Resource AllocationDiscounts applied automatically to eligible resources; no need to allocate specifically.Must specify the resources and quantity to commit to, and the discount is applied accordingly.
Comparative Analysis of GCP CUD vs SUD

In essence, CUDs provide substantial savings and budget stability for consistent usage, while SUDs offer flexible, incremental savings for varying workloads. As each has distinct advantages, you can choose your discount type based on your specific business needs and financial goals.

Conclusion

GCP CUD vs SUD have their own set of strengths, designed to cater to different business needs and usage patterns. Choosing the right discount strategy depends on your specific business needs and usage patterns. By carefully evaluating your requirements and understanding the benefits and limitations of GCP CUD vs SUD, you can make an informed decision that aligns with your financial goals and operational strategies.

Using the right GCP pricing model and implementing proper FinOps Strategies in your GCP ecosystem can greatly reduce your cloud spending. Ultimately, whether you lean towards the commitment of CUDs or the flexibility of SUDs, the right choice will help you optimize your cloud costs, ensuring that you get the most value out of your investment in the Google Cloud Platform.

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Heera Ravindran

Content Marketer at Economize. An avid writer and a zealous reader who specializes in technical content and has a passion for all things Cloud and FinOps.

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