# Missed use of committed use discounts for Compute Engine Canonical: https://www.pointfive.co/efficiency-hub/inefficiencies/missed-use-of-committed-use-discounts-for-compute-engine Workloads with predictable, long-running compute usage continue to run entirely on on-demand pricing instead of leveraging Committed Use Discounts. By: Jay Kahlon Updated: 2026-09-28 [Cloud Efficiency Hub](https://www.pointfive.co/efficiency-hub) # Missed Use of Committed Use Discounts for Compute Engine The short version Workloads with predictable, long-running compute usage continue to run entirely on on-demand pricing instead of leveraging Committed Use Discounts. [Jay Kahlon](https://www.linkedin.com/in/jaykahlon) Senior Cloud Consultant @ IBM GCP service [GCP Compute Engine](https://www.pointfive.co/efficiency-hub/cloud-services/gcp-compute-engine) Category [Compute](https://www.pointfive.co/efficiency-hub/service-category/compute) Reference CER-0282 Type Suboptimal Pricing Model ## Explanation Why the waste happens and who it affects. For stable environments, such as production services or continuously running batch workloads, failing to apply CUDs results in materially higher compute spend without any operational benefit. The inefficiency is driven by pricing choice, not resource overuse. ## Billing model The pricing dimensions that drive this cost. Compute Engine instances are billed at on-demand rates by default, although some machine series (N1, N2, N2D, C2, M1, and M2) automatically receive sustained use discounts of up to 20% or 30% when they run for more than 25% of a billing month. Committed Use Discounts (CUDs) provide discounted pricing in exchange for a 1- or 3-year commitment to a consistent level of compute usage. Without CUDs, steady workloads incur higher on-demand costs. There are two CUD models. Resource-based CUDs commit to a minimum amount of resources in a specific region and machine configuration. Compute flexible CUDs are spend-based: they commit to a minimum hourly spend and apply across projects, regions, and eligible machine families, as well as GKE and Cloud Run. Sustained use discounts do not apply to usage already covered by CUDs, so compare CUD savings against the SUD-adjusted rate. ## How to detect 3 checks to find it in your estate. - Review whether compute workloads run continuously or have stable baseline usage - Assess whether current usage patterns indicate long-term commitment suitability - Identify environments where compute demand is predictable across months ## How to fix 4 ways to remove the waste. - Purchase appropriate Committed Use Discounts for workloads with steady usage - Choose resource-based CUDs for stable machine types in a fixed region and project, and Compute flexible CUDs when usage shifts across regions, projects, or machine families - Align commitment size and term length with expected baseline demand - Periodically reassess commitments to ensure they still match workload patterns ## Documentation Vendor references for pricing and configuration. - [Committed use discounts (CUDs) for Compute Engine docs.cloud.google.com](https://docs.cloud.google.com/compute/docs/instances/committed-use-discounts-overview) - [Sustained use discounts docs.cloud.google.com](https://docs.cloud.google.com/compute/docs/sustained-use-discounts) - [VM instance pricing cloud.google.com](https://cloud.google.com/products/compute/pricing) ## Related inefficiencies [Browse the library](https://www.pointfive.co/efficiency-hub) - GCP Compute Engine CER-0468 ### [Missed Use of Spot VMs for Fault-Tolerant Compute Engine Workloads](https://www.pointfive.co/efficiency-hub/inefficiencies/missed-use-of-spot-vms-for-fault-tolerant-compute-engine-workloads) Spot VMs run the same machine types as standard VMs at discounts of up to 91% for many machine types, GPUs, TPUs and Local SSDs, in exchange for no availability guarantee: Compute Engine can preempt them at any time. Batch processing, CI... Compute - GCP Compute Engine CER-0089 ### [Underutilized VM Commitments Due to Architectural Drift](https://www.pointfive.co/efficiency-hub/inefficiencies/underutilized-vm-commitments-due-to-architectural-drift) VM-based Committed Use Discounts in GCP offer cost savings for predictable workloads, but they are rigid: they apply only to specified VM types, quantities, and regions. When organizations evolve their architecture - such as moving to GKE... Compute - GCP Compute Engine CER-0095 ### [Missing Scheduled Shutdown for Non-Production Compute Engine Instances](https://www.pointfive.co/efficiency-hub/inefficiencies/missing-scheduled-shutdown-for-non-production-compute-engine-instances) Development and test environments on Compute Engine are commonly provisioned and left running around the clock, even if only used during business hours. This results in wasteful spend on compute time that could be eliminated by scheduling... Compute --- Source: the public page above. Product screenshots and illustrative interfaces are examples, not live customer data.