Committed use discounts (CUDs) for Compute Engine

After opting in

Commitment fee

You purchase a compute flexible commitment for your Cloud Billing account for either a 1- or 3-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.

How CUDs apply to usage costs

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. The fundamental difference between the two spend-based pricing 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.

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.

Before opting in

You purchase compute 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.

Commitment activation and commitment fee

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 compute flexible CUDs. At the end of each month, Google Cloud calculates your total commitment fee for that month and bills you that amount.

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.

Overage

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 compute 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.

Commitment utilization criteria

A single compute flexible commitment covers your eligible spend across Compute Engine, GKE, and Cloud Run. For any given compute flexible commitment, the discounts from compute flexible CUDs that you receive are distributed across these services in proportion to their individual eligible spend amounts. Depending on whether your Google Cloud usage is limited to Compute Engine or also spans across these other services, you might see differences in the compute flexible CUDs that you receive for your commitment.

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 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.

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 compute 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 compute 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 compute 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 compute 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 compute 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.

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