Spend-based committed use discounts (CUDs) provide a discount in exchange foryour commitment to spend a minimum amount per hour for a product. The discountapplies to the set of eligible resources for the product. For other types ofCUDs, seeCommitted use discounts.

Important: This document discusses some spend-based committed use discounts(CUDs) that automatically migrate to a new consumption model, which leveragesdiscounts rather than credits. The migration date is indicated by a notificationin the Google Cloud console Billing Overview page. To understand the changesand determine if there is required action on your part, seeCUD programchanges.

Products covered by spend-based commitments

You must purchase separate spend-based commitments for eachGoogle Cloud product that CUDs are available for. The CUDs applyto eligible usage in any projects that the Cloud Billing account pays for.

The following table shows which CUDs migrated to the new consumptionmodel (direct discount, no credits) and which remain on the legacy credit model(list price charge + credit offset). This doesn't apply toResource-basedCUDs (for example,specific machine type commitments).

Affected CUDs (new CUD model using discounts)	Unaffected CUDs (legacy CUD model using credits)
Compute Engine flexible CUDs (covers eligible spend on Compute Engine, Google Kubernetes Engine, and Cloud Run)	All VMware Engine CUDs
AlloyDB for PostgreSQL	Backup and DR (for VMware Engine)
Backup and DR (for Oracle)	Backup for GKE
BigQuery	NetApp Volumes
Bigtable
Cloud SQL
Dataflow
Firestore
Managed Service for Apache Kafka
Memorystore
Spanner
Cloud Run (no longer available for purchase)
Google Kubernetes Engine (GKE) Autopilot (no longer available for purchase)

How spend-based CUDs work

When you purchase a commitment, you are committing to a specific hourly spend amount.The system checks your usage every hour to apply the discount. It is crucial tounderstand the boundaries of CUDs, specifically overage and underutilizationscenarios.

Important: Youcannot cancel the commitments you have purchased. You mustpay the agreed-upon monthly amount for the duration of the commitment. Yourcommitment and the resources covered by it are not affected by future changes tothe standard prices for those resources. If you accidentally purchased acommitment or made a mistake configuring your commitment, contactCloudBilling Support for help.

Overutilized CUDs (exceeding your commitment)

If your eligible usage in a given hour exceeds the amount you committed to, theCUD covers usage up to your limit, and the remainder is billed at the standardrate.

• Mechanism: The system applies the CUD discount to the first blockof usage equal to your commitment.
• Cost: Any usagebeyond that limit is charged at the standardon-demand price (the "Default" consumption model). You don'treceive any discount on the overage.

Underutilized CUDs (not meeting your commitment)

If your eligible usage in a given hour is less than your committed amount, youare still responsible for the full cost of the commitment.

• No rollover: Unused commitment doesnot carry over to the next hour.
• Cost: You pay for the full commitment amount you purchased.
• In the new consumption model: Because you did not fully use thecommitment, the FEE_UTILIZATION_OFFSET credit won't be large enough tofully negate the $1 CUD fee SKU. The remaining balance on the fee SKUrepresents your cost for the unused commitment.

The following screenshot shows how an underutilized CUD might appear in theCost breakdown report.

Commitment amount and usage billing calculations

The CUD model determines how your commitment amount and usage billing iscalculated, including how your savings are displayed:

	Affected CUDs (new CUD model using discounts)	Unaffected CUDs (legacy CUD model using credits)
Commitment amount	You commit to thediscounted spend (the actualamount you pay).	You commit to theon-demand spend (the listprice value).
Usage charges	Usage is billed directly at thediscountedrate.	Usage is billed atlist price; a credit offsetsthe cost.
Savings display	Reports shownet savings (calculateddifference).	Reports show thegross credit amount.

Consumption models

The new CUD program introduces the concept of consumption models. InCloud Billing, a consumption model represents the price you pay for acertain amount of SKU usage within a certain context. A SKU can have severalconsumption models, but only one applies to any given amount of usage at aparticular time. Each SKU has at least one consumption model, whose descriptionisDefault.

Consumption models often represent various kinds of discounted SKU usage,such as committed use discounts (CUDs). For example, if a one year Flex CUDcovers a particular VM usage, then the consumption model that applies to thatSKU usage has the descriptionCompute Flexible CUD - 1 Year.

For spend-based CUDs, consumption models replace the legacy system of usingcredits to offset usage costs calculated at list price. The new model alsochanges how commitments are purchased.

To support consumption models, several fields were added or updated inthe Cloud Billing data model.

For each SKU, a new metadata field,Consumption Model, represents the price ofusage for that SKU. This price applies when the system monetizes usage for thatSKU under this particular consumption model. For example, if a 1-Year Flex CUDcovers VM usage, then the consumption model of the usage has a value of1 YearFlex CUD.

For more information, seeOffers and consumption model IDs.

SKU and fee structure changes

The new CUD model introduces structural changes to how SKUs appear in your dataand how fees are calculated.

• Usage list prices vs. Fee list prices: The list price of your SKUusage (for example, the cost of running a VM) hasnot changed.However, the list price of theFee SKUs has changed to$1. This is astructural change to the data model to support the new discount method.
• Direct comparison: Because the Fee SKUs are now $1 (unlike the oldmodel where they were priced lower to reflect the discount), you cannotcompare the raw Fee SKU costs directly between models. To get an accuratecomparison of your costs, you must calculate the total net cost includingcredits.
• Savings calculation formula: In the new model, the Cost Management userinterface reflects your savings using this formula:Cost at on-demand rates - Cost at CUD consumption rate + CUD Fees

• Fee utilization offset: When you use your CUD, the systemapplies a credit called FEE_UTILIZATION_OFFSET that specifically negatesthe cost of the CUD fee SKU. If you are fully utilizing a CUD, the fee SKUwill have a zero net cost.

  The following screenshot shows how a fully utilized CUD might appear inyour reports.

  

• Consumption models for usage: A single SKU (for example, a specificVM instance type) can now have multiple consumption models.

  • Default: Represents the standard list price.
  • CUD model: Represents the discounted price (for example,"Compute Flexible CUD - 1 Year").
  • Logic: The system automatically applies the correctconsumption model to your usage. If a 1-year Flex CUD covers aparticular VM, that usage is recorded under the "1 Year Flex CUD"consumption model rather than "Default".

New CUD fee SKUs

The existing CUD fee SKUs are replaced with new SKUs. These SKUs are priced at$1/hr, unlike the existing SKUs, which are priced at a lower rate to indicatethe CUD benefit. The CUD benefit is now reflected using the consumption modelprices described inConsumption models.This doesn't affect your costs.

New Offer IDs and Consumption model IDs are shared for allin-scope CUDs.

Common spend-based CUD tasks

For the most common spend-based CUD tasks, see the following:

• Purchase spend-based commitments.
• View your commitments.
• Verify your discounts after migration.
• Analyze the effectiveness of your CUDs.

Important: Youcannot cancel the commitments you have purchased. You mustpay the agreed-upon monthly amount for the duration of the commitment. Yourcommitment and the resources covered by it are not affected by future changes tothe standard prices for those resources. If you accidentally purchased acommitment or made a mistake configuring your commitment, contactCloudBilling Support for help.

Purchase spend-based commitments

Before purchasing, review these details to ensure the commitment aligns withyour situation.

• Region specificity: Most spend-based CUDs are restricted to theregion you select during purchase. Eligible usage in other regions willnot count toward the commitment and will be charged at on-demand rates.
• Billing account scope: Commitments are tied to the specific billingaccount used for purchase. Youcannot share the discount acrossdifferent billing accounts, even if they belong to the same organization.
• Irreversibility: Once purchased, youcannot cancel a commitment.You are obligated to pay the agreed-upon amount for the full duration ofthe term (1 or 3 years), regardless of changes in your business needs orusage patterns.
• No modifications: You cannot lower your commitment amount or changethe region or term after purchase. However, you can purchaseadditionalCUDs to stack on top of existing ones if your usage grows.

You can purchase spend-based CUDs in the Google Cloud console.

Permissions required

To purchase or manage spend-based CUDs for your billing account, you mustbe aBilling Account Administrator.

Steps to purchase

1. Sign in to the Google Cloud console.
2. Open theNavigation menu and selectBilling.
3. If you have multiple billing accounts, selectGo to linked billingaccount orManage billing accounts to choose the correct one.
4. From the Cloud Billing menu, selectCommitted use discounts (CUDs).
5. SelectPurchase.
6. Select theProduct (for example, Compute Engine).
7. Enter aName for your commitment.
8. Choose aCommitment term (1 or 3 years).
9. Enter your hourly commitment amount.
   • For new model CUDs: Enter theequivalent discounted spend.
   • For legacy model CUDs: Enter theequivalent on-demand spend.
   • Use theCUD recommendations tool in the console. It automaticallycalculates the correct amount based on your historical usage.
10. Review theCommitment summary.
11. ClickPurchase to preview, and then clickPurchase again to confirm.

CUD activation time

After purchase, the commitment goes into effect based on the time ofpurchase:

• Purchased at :00 to :49 (first 50 mins of the hour): Starts at thebeginning of thenext hour.
• Purchased at :50 to :59 (last 10 mins of the hour): Skips an hourand starts at the beginning of thehour after next.

CUD program changes

As part of the CUD migration, the majority of spend-based CUDs have moved to anew consumption model that charges the discounted price directly. However, asmall subset of CUDs remain on the legacy credit-based model. Existing CUDcustomers might need to take action to adopt the new CUD program.

The changes include:

• Simplified billing: Google Cloud uses discounted prices torepresent savings from spend-based CUDs, making it easier for you tocalculate the total cost of your CUDs and savings. This moves away from thelegacy concept of offering credits to offset costs.
• Greater flexibility: Expands the scope for some spend-based CUDs. As aresult, a larger portion of your usage might be eligible for discounts.These changes don't increase your total costs.
• Added consumption models: A better way to understand and track yourcloud spending, especially concerning promotional offers and discounts. Formore information, seeconsumption models.
• Expanded product coverage for CUDs. For more information, seeaffectedCUDs.
• Changed display of direct savings: We now display the direct CUD savingson your bill. For more information, seeUnderstand how CUDs impact yourbill.
• Simplified CUD fee SKUs: New CUD fee SKUs replace existing CUD fee SKUs.The price for these new SKUs is $1. For more information, seeSimplifiedCUD fee SKUs.
• Updates to the CUD purchasing experience: Your hourly commitment amountis now the discounted price instead of the on-demand price. For moreinformation, seeCUD purchasing experience.
• New CUD metadata export to BigQuery. For moreinformation, seeCUD metadata export.

Determine any required action

Depending on your configuration, you might need to take action to ensurecompatibility with the new CUD data model:

• For BigQuery users: If you export Cloud Billing data toBigQuery, you must update any internal systems that depend on theprevious data schema. This includes updating FinOps cost managementreporting dashboards to match the new schema.
• ForCloud Commerce Consumer Procurement API users:The API is updated to enable purchasing of CUDs in the new model. It requiresyou to update any code that automates purchases of spend-based CUDs to usethe new offer names and commitment amounts.

Helpful resources

Use the following resources to update your internal systems that might beaffected by the new CUD data model:

• Spend-based CUDs data model updates:Details about the spend-based CUD data model changes and tools to help youadopt the changes.
• Verify your discounts after migration:Explains how to view and confirm your discount percentages, savings, and ROIafter migration.
• CUD KPI example queries:Example queries that show how to use Key Performance Indicators (KPIs)metrics to validate that your systems are functioning well with the new CUDdata model.
• List of new CUD fields:Descriptions of new fields, such as CUD Fee SKU IDs, offer names, andconsumption model IDs.
• Migrated CUD SKUs, offers, and new consumption models:Information on migrated CUD SKUs, offers, and consumption model IDs withinthe new program data model.
• CUD metadata export to BigQuery:Provides a daily snapshot of your spend-based CUDs commitment metadata to aBigQuery table.

Billing user interface improvements

We improved theBilling section of the Google Cloud console to better enable accurate cost management andoptimization experiences for CUDs.

To see the list of improvements to the Cloud Billing user interface, seeBilling user interface improvements.

Get support

If you have questions regarding how CUDs appear on your bill or need assistancewith the new data model, contactCloud Billing Support.

Next steps

• Determine your commitment amount

Related topics

• Migrated CUD SKUs, offers, and consumption model IDs
• Committed use discounts
• Analyze the effectiveness of your CUDs
• Verify your discounts
• View the credits you are receiving in reports
• Understand your savings with cost breakdown reports