Sustained Use Discounts - GCP Cost Management

Sustained Use Discounts (SUDs) are a powerful tool in cost management for cloud computing. It enables long-running virtual machines and resources to automatically enjoy cost savings, and is particularly suitable for enterprises and individual users who want to achieve maximum value in cloud environments. This article will deeply analyze the operating principles, restrictions and actual application scenarios of this function to help you better understand and use this preferential policy.

If you want to know how to achieve the best benefits on GCP cost saving, you can refer to:How to maximize cloud benefits through GCP savings and discounts?

What are Sustained Use Discounts?

Compute Engine offers renewal discounts (SUDs) that apply to resources used for more than 25% of the billing month, and the system automatically applies a discount for each additional hour of usage if no other discounts are available. The longer you use the service, the higher the discount will be, up to 30% off resource costs, especially for virtual machines (VMs) running for a whole month.

For more technical details and rules about SUDs, please refer toGoogle official documents.

Restrictions

Renewal discounts apply under the following conditions:

1. Available only for Self-serve or Online Cloud Billing accounts.
2. UsedCommitted Use Discounts (CUDs)Resources are not eligible for SUDs.
3. Applies only to VMs created by Compute Engine and Google Kubernetes Engine.
   • VMs created by App Engine and Dataflow are not eligible.
4. Discounts apply to selected machine series only.(Please refer to the official resource list for details)

How it works and how to use discounts

Compute Engine automatically calculates and applies renewal discounts, and users do not need to enable them manually. The discount is applied to your monthly bill as credits against resource usage charges.

• The credit has no cash value and can only be used during the current month.
• You can view the credits earned each month in the Cost Sheet report in the Google Cloud Console.

How renewal discounts are calculated

Compute Engine calculates the total resource usage each month and provides credits for eligible resources based on the resource's maximum discount percentage.

• There is no need to run the VM continuously for the entire month.Even if you stop the VM midway, Compute Engine still accumulates the usage time of each resource.
• Resource usage is aggregated by machine family and region, in order to maximize the discount benefits.

Discount ratio

As resource usage increases, the discount rate will also increase. Discount tiers are calculated based on usage time thresholds of 25%, 50%, 75% and 100%.

The figure above shows an example of how resource usage can be discounted, for example:

• The maximum monthly discount on resources is 30%.
  • For 50% of the month used, the discount is 10%.
  • For 75% of the month used, the discount is 20%.
  • Use the entire month and the discount is 30%.
  • hint: To maximize the discount, it is recommended to create a VM at the beginning of the month and use it throughout the month.

Renewal Discount Calculation Example

Renewal discount calculation example 1

Assume the following scenario:

• First half of the monthRun an n1-standard-4 VM (4 vCPUs and 15 GB memory).
• Upgrade in the second half of the month,and run a larger n1-standard-16 VM (16 vCPUs and 60 GB memory).

Compute Engine breaks down and combines resources as follows:

• 4 vCPUs: For the entire month, (4 vCPUs * $0.031611 * 730 hours) * 0.7 = $64.612884
• 12 vCPUs：Half a month of usage, (12 vCPUs * $0.031611 * 365 hours) * 0.9 = $124.610562
• 15 GB RAM: For a full month, (15 GB * $0.004237 * 730 hours) * 0.7 = $32.476605
• 45 GB RAM：Usage for half a month, (45 GB * $0.004237 * 365 hours) * 0.9 = $62.6334525
• lump sum:$284.3335035

Renewal Discount Calculation Example 2

For GPU resources, the discount is calculated based on the number of GPU models. Compute Engine aggregates usage time of GPUs of the same model across different VMs to provide the maximum discount.

For example:

• For the first half of the month, a VM with 1 GPU was used.
• The second half of the month used another VM with 4 GPUs.

The discount is calculated as follows:

1. 1 GPU(All month): Enjoy 30% off.
2. 3 GPUs(Half Month): Enjoy 10% discount.

in conclusion

Renewal discounts are an important feature of Compute Engine that help users effectively reduce the cost of long-running resources. Properly planning resource usage time and making good use of the discount can significantly reduce cloud operating expenses.

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