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How to Leverage Committed Use Discounts (CUDs) for GCP Cost Efficiency

Originally Published May, 2024 · Last Updated July, 2024
GCP CUDs

Managing cloud computing costs effectively is crucial for businesses that rely on cloud services. 

It doesn’t matter if it’s Google Cloud, Amazon Web Services (AWS), or Microsoft Azure — every penny counts. Learning how to take advantage of long-term pricing discounts can translate into significant savings for your business. 

One strategy you can leverage to optimize cloud spend on Google Cloud Platform (GCP) is using committed use discounts (CUDs). CUDs offer a way to reduce your bills by committing to using a certain amount of resources over a specific period. 

Whether you’re running numerous virtual machines or leveraging the power of Google’s data analytics, CUDs can make your investment more cost-effective. 

In this article, we’ll explore how you can use these discounts for your cloud infrastructure and better manage your budget with Google Cloud. Read on!

How to leverage CUDs for better cost efficiency

Leveraging CUDs is a smart way to reduce your GCP waste. In a nutshell, CUDs offer significant discounts in exchange for long-term commitments. Here’s how it breaks down:

  • Long-term commitment: You agree to use a certain amount of resources (like CPUs, memory, or other services) over a one-year or three-year term. In return, GCP rewards you with a lower rate than you’d get with On-Demand resources.
  • Discount levels: Discounts can reach upto 70% for memory-optimized machine types and a discount of up to 55% for all other machine types, significantly reducing your cloud expenses.

Getting familiar with strategies that reduce cloud costs can impact your cloud spend for the better. Here’s what you need to know:

1. Analyze your usage patterns

Understanding your cloud usage patterns is crucial when considering committed use discounts. 

By assessing your resources for historical and current usage patterns, you can identify stable and predictable workloads that consistently use a certain amount of resources. 

These workloads are ideal candidates for CUDs because they represent regular and reliable consumption, making long-term commitments highly cost-effective.

Predictable workloads allow you to secure resource-based discounts with confidence, knowing you’ll use these resources continuously. This enables you to maximize the return on your commitment. For the dynamic workloads, commitments are required to be managed differently. You can read more about managing cyclical workloads using Commitment-Based Discounts

2. Start small and stack

When venturing into CUDs, start with a smaller commitment that reflects your confirmed usage to minimize the risk of over-commitment. 

As your needs grow and stabilize, you can enhance your savings by stacking additional commitments. For example, if you start with Cloud SQL CUDs worth $5/hour and later find stable usage for an extra $2/hour, you can combine these to create an effective CUD of $7/hr. 

However, different commitments will have varying expiration dates, potentially increasing the administrative burden. Tools like ProsperOps can help you manage these manual complexities by automating portfolio management. This ensures that your commitments are continuously optimized without the need for time-consuming manual intervention.

3. Choose the right commitment term

Choosing the optimal commitment term for your CUDs — be it one year or three years — depends heavily on your usage analysis. This decision should balance the need for flexibility against the potential for cost savings. 

A longer-term commitment typically offers deeper discounts but requires a thorough understanding of your future resource needs to avoid wastage. 

It’s about understanding the break-even point and matching your anticipated cloud resource consumption with the appropriate term to maximize savings — without sacrificing adaptability to changing business needs.

4. Select appropriate resources to commit

Selecting the right resources for CUDs involves analyzing which components of your cloud infrastructure (e.g., vCPU, RAM, sole-tenant nodes, local SSDs) are most heavily used and likely to remain in demand. Committing to these resources can yield substantial savings. 

Depending on what you use, different types of CUDs (resource-based or spend-based) may apply. Tailor your commitments to the resources that are the costliest and are expected to scale with your operations.

5. Manage and monitor your commitments

Effective management and monitoring of your CUD commitments is vital to ensure they align with your actual cloud usage.

This includes regularly checking your effective savings rate, coverage, and utilization of the committed resources. You may need to make adjustments as your business scales or shifts in direction, which can influence your cloud resource consumption.

Proactive management ensures your commitments remain cost-effective and reflect your usage.

6. Use an autonomous discount management solution

Employing an autonomous discount management solution like ProsperOps can enhance your CUD management and overall cloud spending. 

These solutions automatically adjust your commitments to match usage patterns and seek opportunities for additional savings. They relieve your team of the constant manual adjustment of cloud resources.

By following these strategies, you’ll be equipped to use CUDs effectively for better cost efficiency in the GCP environment. Remember, strategic management of cloud resources lowers costs and aligns spending with actual usage, supporting smarter Cloud FinOps operations.

Make the most out of your Google Cloud with ProsperOps 

Using CUDs on Google Cloud Platform rewards you with significant cost savings and helps you craft a smarter, more flexible approach to your cloud spend. But only if you manage them correctly. 

ProsperOps automates your management of these discounts, ensuring they adapt to your actual usage. In turn, you maximize your Effective Savings Rate (ESR).

Whether you’re dealing with predictable or variable cloud workloads, ProsperOps’ ability to autonomously manage resource-based and spend-based CUDs ensures you achieve the highest possible savings with minimal risk and zero manual intervention, saving your engineering time too.

Our customers consistently see savings that place them in the 98th percentile of cloud cost management. When it comes to optimizing cloud spend, ProsperOps isn’t just a tool — it’s a transformative platform.

Schedule a live demo today to learn how you can boost your bottom line with ProsperOps.

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