What Are GCP Reserved Instances?

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Table of content

Types of GCP Reserved Instances (a.k.a. Committed Use Discounts)

Resource-Based Commitments
a) You commit to a specific number of vCPUs and memory in a particular region.
b) Ideal for Compute Engine workloads.
c) Flexibility across machine types within the region.
Spend-Based Commitments
a) You commit to a monthly dollar amount of usage for supported services.
b) Applies to services like Cloud SQL, Cloud Run, Dataproc, etc.
c) Automatically applies discounts across eligible usage.

Things to Consider When Buying Committed Use Discounts

Forecast Accuracy: Commitments are billed regardless of actual usage, so accurate forecasting is critical.
Service Scope: Not all GCP services are eligible for CUDs.
Duration Flexibility: Choose between 1-year or 3-year terms based on budget and workload predictability.
Regional Lock-in: Resource-based commitments are tied to regions — no global flexibility.
No Modifications: Commitments cannot be changed or canceled once purchased.

Benefits of Committed Use Discounts (CUDs)

a) Significant cost savings (up to 57%)

b) Flexibility in VM types (within a region)

c) Predictable billing for long-term workloads

d) Applicable to a range of GCP services

e) Better efficiency for stable, always-on workloads

Drawbacks of Committed Use Discounts (CUDs)

a) No refunds or changes after commitment

b) Risk of underutilization and wastage

c) Regional scope may limit flexibility

d) Requires accurate forecasting

e) Not transferable between projects or regions

Hence, to extract maximum value from your GCP spend, you need to have top-tier optimization strategies in place. Learn more about GCP optimization here.

Comparison: AWS Reserved Instances vs GCP Committed Use Discounts

Metric	Where GCP Fares Better	Where AWS RI Fares Better
Flexibility	GCP CUDs apply to any VM in the region regardless of machine type.	AWS RIs are often tied to specific instance types unless convertible RIs are used.
Commitment Model	Spend- or resource-based; decoupled from specific instances.	Instance-based; allows capacity reservation and broader control.
Ease of Use	Automatic discount application across eligible services.	RIs can be complex with multiple types (Standard, Convertible, Zonal).
Cross-Service Support	CUDs apply to multiple services (Cloud SQL, Dataproc, etc.), not just VMs.	RIs are mostly focused on EC2, with separate reserved pricing for RDS, Redshift, etc
Market & Resale	No marketplace for unused CUDs — commitment is final.	AWS RIs (Standard) can be sold on the AWS RI Marketplace.

Frequently Asked Questions (FAQs)

Q1: What are the most commonly used GCP services eligible for Committed Use Discounts?
Compute Engine, Cloud SQL, Cloud Run, Dataproc, and Cloud Functions are commonly eligible for CUDs.
Q2: Can I cancel or modify a Committed Use Discount once purchased?
No. Once purchased, CUDs cannot be canceled, modified, or transferred.
Q3: Does GCP offer automatic application of discounts for eligible services?
Yes. Once committed, GCP automatically applies the discount to matching usage.
Q4: Are Committed Use Discounts applicable in a multi-region or global setup?
No. CUDs are region-specific and cannot be shared across multiple regions.
Q5: How do GCP Committed Use Discounts compare with AWS Reserved Instances in terms of flexibility?
GCP offers greater flexibility within regions and across VM types, whereas AWS provides capacity reservation and resale options.

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