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.

Note: This document discusses some spend-based committed use discounts (CUDs) that automatically migrate to a new consumption model, which leverages discounts rather than credits. The migration date is indicated by a notification in the Google Cloud console Billing Overview page. For more information about the improvements, the affected CUDs, and any required actions on your part, see Spend-based CUDs.

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:

• Purchase commitments without attached reservations
• Purchase commitments with attached reservations
• Purchase commitments for licenses

Compute flexible CUDs

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, compute flexible CUDs eliminate the need to restrict your commitments to a single project, region, or machine series. With a compute 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 compute flexible CUDs apply to the other services, see the following documents:

• CUDs documentation for GKE
• CUDs documentation for Cloud Run

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, N4, N4D, and N4A machine series
• Compute-optimized: H3, H4D, C2, and C2D machine series
• Memory-optimized: M1, M2, M3, and M4 machine series
• 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 compute flexible CUDs.

Note: For memory-optimized VMs, compute flexible CUDs are available only for 3-year commitments. When you purchase a 1-year compute flexible commitment for your memory-optimized VMs, you don't receive any discount on your usage. Your eligible memory-optimized VM spend will burn down your otherwise unused commitment without any discount.

To view the full list of SKUs that are eligible for compute flexible CUDs, see SKU Groups - Compute Flexible CUD Eligible SKUs.

Applicable discounts

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

Service	Spend eligible on	1-year CUDs	3-year CUDs
Compute Engine	M1, M2, M3, and M4 machine series	No discounts	63%
	H3 and H4D machine series	17%	38%
	C2, C2D, C3, C3D, C4, C4A, C4D, E2, N1, N2, N2D, N4, N4D, and N4A machine series	28%	46%
	Local SSD disks	28%	46%
	Sole-tenancy premium	28%	46%
GKE	GKE Standard and GKE Autopilot	28%	46%
Cloud Run	Cloud Run services with request-based billing	17%	17%
	Cloud Run functions	17%	17%
	Cloud Run services with instance-based billing, Cloud Run jobs, and Cloud Run worker pools	28%	46%

Note: The discounts that you receive may differ for Cloud Billing accounts that have other on-demand VM savings in effect.

How compute flexible commitments work

This section explains how compute flexible commitments work and the manner in which compute flexible CUDs apply to your eligible Google Cloud spend.

Commitment fee

When you purchase a compute flexible commitment for your Cloud Billing account for either a 1- or 3-year term, you commit to spending a minimum hourly amount on eligible resources and services for the duration of the commitment's term. 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.

How CUDs apply to usage costs

After your commitment becomes active, you start receiving eligible resources and services at discounted prices. Google Cloud applies the discounts directly to the prices of all eligible resources and services. To summarize, you are committing to an hourly spend that is based on the discounted resource costs.

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 as determined by the CUD consumption model rates. The consumption model ID is D97B-0795-975B for 1-year compute flexible commitments and 70D7-D1AB-12A4 for 3-year compute flexible commitments.
• Your commitment fee offsets these discounted usage costs until your total hourly spend equals the commitment fee value. At this point, your compute flexible commitment is considered to be fully utilized.

Commitment utilization criteria

Your Cloud Billing account might have multiple spend-based commitments that can cover usage of the same resource or service type. Additionally, a single compute flexible commitment can cover the usage of several types of resources and services. For a given Cloud Billing account, Google Cloud applies spend-based commitments to any eligible hourly usage in the following order of precedence. If you have multiple spend-based commitments and multiple types of usage, then these rules determine which commitment Google Cloud utilizes first and which usage Google Cloud covers first.

1. Service-specific commitments first: If both a compute flexible commitment and a service-specific spend-based commitment can cover the same usage, then the service-specific commitment takes precedence. By first utilizing the commitment with a narrower scope, Google Cloud keeps the more generic and broader-scoped commitment available for other types of usage.

   Example: Suppose that you purchased a compute flexible commitment and a legacy Cloud Run commitment to cover eligible Cloud Run functions usage. In this scenario, Google Cloud first utilizes your service-specific Cloud Run commitment to cover the eligible usage.

2. Oldest compute flexible commitment first: If you have multiple compute flexible commitments that can cover the same eligible usage, then Google Cloud first utilizes the active commitment that you purchased first. After Google Cloud fully utilizes that commitment, it uses the next oldest commitment to cover the remaining eligible usage.

   Example: Suppose that you have N2 VM usage that can be covered by two compute flexible commitments called compute-flexible-commitment-1 and compute-flexible-commitment-2. If you purchased compute-flexible-commitment-1 four months ago and purchased compute-flexible-commitment-2 only a week ago, then Google Cloud first utilizes compute-flexible-commitment-1.

3. Higher discount rates first: Within a single compute flexible commitment, if you have eligible usage from multiple resource or service types, then the commitment first covers the usage that receives the highest discount off on-demand prices.

   Example: Suppose that you have a 3-year compute flexible commitment to cover H3 VM usage (which qualifies for 38% CUDs) and Cloud Run functions usage (which qualifies for 17% CUDs). In this scenario, your compute flexible commitment first covers your H3 usage and then covers your Cloud Run functions usage.

4. Proportional distribution: After applying all the preceding criteria, if there's any remaining portion of a compute flexible commitment, thenGoogle Cloud applies that across Compute Engine, GKE, and Cloud Run in proportion to their remaining eligible spends. If eligible usage remains after Google Cloud fully utilizes the compute flexible commitment, then Google Cloud uses these criteria again to check for another compute flexible commitment to cover that usage.

   Example: Consider a scenario where Google Cloud applied all the preceding criteria and you still have a portion of your compute flexible commitment and some eligible usage remaining. Your commitment can cover another US$100 worth of on-demand spend and the on-demand cost for your remaining eligible usage is US$150. Suppose the US$150 of on-demand spend is distributed as follows: US$75 for Compute Engine, US$37.50 for GKE, and US$37.50 for Cloud Run. The ratio of the on-demand spend across these services is 2:1:1. In this scenario, Google Cloud utilizes the remaining US$100 from your commitment to cover this usage in the same 2:1:1 ratio. This means that Google Cloud utilizes your commitment in the following way:

   • covers US$50 worth of Compute Engine usage.
   • covers US$25 worth of GKE usage.
   • covers US$25 worth of Cloud Run usage.

   If your Cloud Billing account has other compute flexible commitments, then Google Cloud utilizes those commitments to cover the remaining US$50 worth of on-demand spend.

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.

Examples of compute 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 example explains how you receive compute flexible CUDs for this commitment:

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 compute 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.

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 example explains how you receive compute flexible CUDs for this commitment:

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.

Purchase compute flexible commitments

You can purchase compute flexible commitments only at a Cloud Billing account level. For more information about how to purchase a compute 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 compute 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 compute 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 and compute flexible commitments for your Compute Engine resources, then Google Cloud applies your commitments, on an hourly basis, according to the following order:

1. Google Cloud first utilizes your resource-based commitments and applies all the resulting resource-based CUDs to any eligible hourly usage. For detailed information about how resource-based CUDs apply to your usage, see the Resource-based CUDs document.
2. Google Cloud then utilizes your compute flexible commitments to cover any eligible usage that wasn't already covered by resource-based commitments. Note that portions of your compute flexible commitment might also cover eligible usage across GKE and Cloud Run. For detailed information about how compute flexible commitments cover your usage, see Commitment utilization criteria.
3. 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 sustained use discounts (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 SKU Groups - Compute Flexible CUD Eligible SKUs.
• If you use your Compute Engine reservations with Google Cloud Serverless for Apache Spark, then those reserved resources aren't eligible for resource-based CUDs.
• If you use your reservations with Dataflow, then you can receive resource-based CUDs only for usage from specifically targeted reservations that specify accelerators (GPUs or TPUs).
• You can purchase compute flexible commitments only at a Cloud Billing account level.
• For Compute Engine, you can't purchase compute 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, compute flexible CUDs are available only for 3-year commitments. If you purchase a 1-year compute flexible commitment, then you don't receive any discounts for your spend on memory-optimized VMs.

What's next

• Learn more about Compute Engine resource-based commitments.
• Browse the pricing tables for Compute Engine machine families for information about their on-demand prices, resource-based commitment prices, and compute flexible CUD consumption rates.
• Learn about CUD analysis reports.
• Learn how to analyze the cost effectiveness of Compute Engine resource-based CUDs.
• Learn how to analyze the cost effectiveness of your compute flexible CUDs.
• Learn more about CUDs for other Google Cloud services.