Cloud costs are continuously on the rise, posing a challenge for businesses aiming to manage their costs effectively. However, Google Cloud offers a valuable pricing model to combat these increasing costs through its Sustained Use Discounts.
These discounts apply automatically and scale with your usage. So, the more you utilize a VM, the larger the discount you receive, without any need for additional planning.
How can your business leverage these discounts effectively? Below, we’ll explore all you need to know about SUDs, including how they work, their benefits, limitations, and tips for maximizing your savings. Read on!
What are Google Cloud Sustained Use Discounts (SUDs)?
Google Cloud’s Sustained Use Discounts (SUDs) are designed to reward consistent, long-term usage of Compute Engine and GKE resources. These discounts are calculated based on the proportion of the month that certain resources, like virtual machines (VMs), are utilized.
Here’s a streamlined overview of how SUDs work:
- Usage Levels: To qualify for a discount, resources must be used for more than 25% of the month.
- Discounts: Depending on the machine type, you can save up to 30% each month.
- Resource-Based: SUDs specifically target and apply to designated Compute Engine resources.
The key advantage of SUDs is their automatic application. There’s no need for upfront commitments or manual enrollment processes. Simply use your VMs, and Google will automatically calculate and apply any discounts based on your usage each month. This system ensures that the more consistently you use your resources, the more you save, streamlining cost optimization without additional overhead.
But remember, not every option in the general-purpose machine family for Compute Engine supports SUDs — including the C3 machine series and the Tau T2D machine series. You can read about the other exclusions here.
How do Sustained Use Discounts (SUDs) work?
Understanding how SUDs work can help you save substantially on your Cloud Billing account.
Automatic application
SUDs automatically apply to your resource usage, eliminating the need for manual activation. You don’t need to do anything to activate these discounts — they’re calculated based on your usage and reflected directly in your Google Cloud bill.
Usage thresholds
Sustained Use Discounts are automatically applied to your Google Cloud VM usage as you reach certain thresholds within a billing month. These discounts are incremental, meaning you pay only for the actual hours you use a VM, and Google Cloud ensures you receive the most favorable pricing during that period.
One important note: There’s no benefit in running a VM longer than necessary just to achieve a higher discount level. For example, while using a resource continuously throughout the month maximizes the monthly discount, it’s crucial to optimize usage based on actual needs rather than potential savings.
Incremental discounts
SUDs apply incrementally, meaning the discount increases with the amount of time you use an instance within a month. This incremental structure benefits you by offering greater savings the more you use the resource, including:
For more details on the incremental discounts, you can read the SUD documentation.
Resource-specific
Discounts are resource-specific. Not all resources qualify for the same discount rates, and some (such as NVIDIA H100, A100, and L4 GPU types) are excluded from the SUD program.
- Up to 20% for N2, N2D and C2 machine types
- Up to 30% for N1, M1, and M2 machine types
For more details, you can read the SUD documentation.
Billing and reporting
You’ll notice the impact of SUDs in your Google Cloud Billing account, as discounts are itemized on the invoice to clearly show how much you have saved. The billing system provides detailed information about these savings, allowing you to easily track your cloud spend.
Benefits and limitations of SUDs
When you’re focusing on cloud cost management, understanding Sustained Use Discounts can make a notable difference. Below, we’ll detail the advantages and limitations of Google Cloud SUDs.
Benefits
- Ease of use: SUDs’ simplicity eliminates the need for manual activation or tracking, making them easy to manage.
- Cost savings: SUDs offer lower costs compared to on-demand pricing by encouraging longer durations of use, optimizing the balance between rate and usage.
- Flexible and scalable: SUDs adapt to changes in usage patterns, offering scalable discounts with increased use and providing flexibility for growing businesses.
- Incremental discounts: The longer a virtual machine (VM) is used each month, the greater the savings. Discounts increase incrementally, rewarding prolonged use.
- Automatic application: Discounts are automatically applied to instances once used for more than 25% of the month, simplifying management and enhancing cost efficiency.
These discounts aim to deliver lower costs than on-demand pricing, perfecting the balance between rate and usage optimization.
Limitations
- Complexity in cost predictions: The varying discount rates can make it challenging to predict monthly costs.
- Eligibility restrictions: Not all Google Cloud services are eligible for SUDs, limiting their utility for certain architectures, such as those using App Engine and Dataflow.
- Usage thresholds: Discounts only apply after exceeding minimum usage thresholds, potentially excluding sporadic or low-usage customers from benefits.
- No stacking: SUDs cannot be combined with committed use discounts (CUDs). Any usage eligible for a CUD will be applied first, rendering that resource ineligible for SUDs.
As mentioned, not all Google Cloud services qualify for SUDs. Ensure your workloads are compatible with these discounts before planning your cost management strategy.
Tips for maximizing savings benefits from SUDs
Understanding and applying these strategies can help your business realize more savings with SUDs.
Identify long-running workloads
Your first step should be to pinpoint workloads that continuously run. These are prime candidates for SUDs, as Google Cloud offers these discounts for VMs that operate for a large portion of the billing period. Knowing which instances are always on helps you capitalize on these savings.
Rightsize VM instances
Next, focus on rightsizing your VM instances to match their workload requirements. Google Cloud provides a variety of machine types, and selecting the right one can ensure you’re not overpaying. Operating a smaller or just-fit instance can be just as effective and cheaper. Therefore, assess and adjust your instances regularly, and ensure you use SUD-eligible machine types to receive a discount.
Leverage an automated commitment management tool
Use tools designed for cloud cost management to automate the process of tracking and applying discounts. These tools can help manage your commitments and optimize discounts in response to changes in your usage patterns without time-consuming manual intervention.
Review and plan for usage thresholds
Finally, make sure you review and understand the usage thresholds for SUDs on the Google Cloud, as incremental discounts increase with the amount of usage. Anticipate your usage levels and plan around these thresholds to ensure you’re not missing out on potential discounts for just a small increase in usage.
What is the difference between Sustained Use Discounts and committed use discounts?
There are two types of Google Cloud discounts that can help you save on cloud costs: Sustained Use Discounts and committed use discounts (CUDs). Let’s break down the differences between them.
As we’ve explained throughout this article, Sustained Use Discounts reward you for continuously using resources. The beauty is in the simplicity — these discounts apply automatically as your usage increases. So the more you use, the more you save, without any upfront commitment.
On the other hand, committed use discounts require some foresight. With CUDs, you commit to consuming a certain amount of resources over one or three years in exchange for defined discounts. This is ideal if your resource needs are predictable and you have a stable, long-term plan for resource usage.
On the other hand, sustainable use discounts (SUDs) are useful if you aren’t able to commit to the platform for one or three years. Typically, CUDs provide higher discounts than SUDs, especially for three-year commitments.
Both plans offer valuable savings options tailored to different usage patterns and commitment levels. Choosing between them depends on your specific needs and the predictability of your resource consumption.
Optimize your Google Cloud Costs with ProsperOps
Optimizing costs on Google Cloud is key to maximizing business value from cloud investments. SUDs, when leveraged strategically, can play a critical role in reducing your cloud spend.
But to maximize savings, you need more than passive discounts; you need active cloud cost management.
ProsperOps delivers cloud savings-as-a-service. Our platform automatically blends discount instruments to maximize your savings while minimizing commitment risk. We dynamically adapt commitment plans to your usage changes, improving your Effective Savings Rate and feeding money back into your cloud budget. Moreover, we perform all these tasks 24/7, requiring no ongoing effort from your busy team.
By removing the effort, latency, and risk associated with manually managing rigid, long-term discount instruments, ProsperOps simplifies cloud financial management with zero technical trade-offs or operational friction within your organization.
Take control of your cloud expenses with ProsperOps: Schedule a demo today.
