Hello and welcome to committed use discounts. In this lesson, we will take a look at what committed use discounts are and what some of the restrictions are that apply to them. We will also take a look at pricing, along with the different commitment types.

Committed use discounts are discounts on compute engine resources that are offered when you purchase committed use contracts. In other words, Google will offer you a deep discount on VM usage costs if you commit to paying for that usage for one or three years.

Committed use discounts can save you up to 57% on most machine types or GPUs, while you can save up to 70% on memory-optimized machine types.

You can visit the URL that you see on your screen to see all the different committed use prices for all the different machine types:

https://cloud.google.com/compute/vm-instance-pricing#general-purpose_machine_type_family

Committed use contracts can be purchased for individual projects or you can purchase multiple contracts that can then be shared across multiple projects through discount sharing.

Once you’ve purchased a committed use contract, you will be billed on a monthly basis for whatever resources that you purchased. If you purchased a one-year committed use contract, you will be billed monthly for your resources, whether you use them or not, for one year. If you purchased a three-year contract, you’ll be billed monthly for three years, whether or not you use the resources that you purchased as part of your contract.

While committed use discounts CAN be purchased for most compute engine machine types, f1-micro and g1-small shared core machines are excluded.

The discounts offered through a committed use discount purchase are applied to the total number of vCPUs, memory, GPUs, and local SSDs within a region. What this means is that your discounts are not affected by any changes you make to the setup of your virtual machines.

In a production environment, what you’ll typically do with committed use discounts is purchase them only for the resources you expect to use. After all, you are going to be charged for them whether you use them or not. So, that being the case, if you plan to use 4 vCPU cores a month for a VM or two, you would typically purchase a committed use discount for 4vCPU cores. If you happen to use 8 cores a month after purchasing your committed use discount for the 4vCPUs, you’ll get the discounted rate on four of the CPUs and you’ll pay regular price for the other 4. ON the flip side, if you purchase a committed use discount for 4vPCUs but only use 2, you will still be billed for all 4 – because you COMMITTED to that plan.

This same scenario plays out for memory as well. If you purchase a discount on 8GB of RAM and use 16GB, you get the discount on 8GB and pay the regular rate on the other 8. If you use 4GB, you still pay the 8GB discounted committed rate.

Now, I should point out that committed use discounts are applied at the project level by default. However, as I mentioned earlier, you can share them across multiple projects if you enable discount sharing from your billing account.

When you share committed use discounts across all of your projects, you can not only reduce the administrative overhead of having to manage multiple discounts on each project, but you can also minimize costs, since you can pool all of your purchased discounts across all of your projects.

Join me in the next lesson, where we’ll take a look at the different commitment types.