Cloud Bento Box - Common Pricing Tricks

Whether you’re just getting one or more cloud services from your provider, then it’s important to spend time to research ways to get value as a bundled package discounts and negotiated prices for your cloud consumption. While the list prices are already cost optimized and competitive there’s no reason to pay list price when so many cost-savings measures are available.

Tryamb recommends these top three ways to get discounts on cloud.

1. Advance Purchase

By purchasing your compute power in advance, you can get a discounted rate — the notable examples being AWS Reserved Instances, Azure Reserved Instances, and Google Committed Use Discounts.

The savings you can get through such reservations is enormous. For example, with Google Cloud, when you purchase a committed use contract, you purchase compute resource (vCPUs, memory, GPUs, and local SSDs) at a discounted price in return for committing to paying for those resources for 1 year or 3 years. The discount is up to 57% for most resources like machine types or GPUs. The discount is up to 70% for memory-optimized machine types.

So will these save you money? Before reserving or committing use your cloud providers Cloud Console to study if this approach is suitable for your organization.

The GCP Recommender, for example, generates a card with information about your VM usage over the last 30 days. If your VMs show a trend of uncommitted usage over 30 days, the Recommender classifies this as an opportunity to purchase committed use discounts to reduce your VM costs.

2. Plan your usage wisely

The primary example of “spending more to save more” in the cloud computing world is Google Sustained Use Discounts. This is an option that allows for automatic savings – as long as you use an instance for at least 25% of the month, GCP will charge you less than list price, with upto 30% discounts on N1 machine family and about 20% on other VM families. The trick is to ensure all of your usage falls within a month as the discounts are proportional to your monthly usage and reset at the beginning of each month.

But just like the advanced purchasing options above, there are several factors to account for before assuming this will really save you “up to 60%” of the cost. It may actually be better to just turn off your resources when you’re not using them.

3. Negotiated Discounts via Enterprise Agreements

Anyone who’s shopped at Costco isn’t surprised that buying in bulk can get you a discount. Last week, Twitter announced that it will be using Google Cloud Platform for cold data storage and flexible compute Hadoop clusters — at an estimated list price of $10,000,000/month. Of course, it’s unthinkable that they would actually pay that much – as such a high-profile customer, Twitter is likely to have massive discounts on GCP’s list prices. We often hear from our Azure customers that they chose Azure due to pre-existing Microsoft Enterprise Agreements that give them substantial discounts.

If you have or foresee a large volume of infrastructure costs, make sure to look into:

• AWS Enterprise Agreements

• AWS volume discounts

• Microsoft Azure Enterprise Agreements

• Azure Hybrid Benefit

• Google Enterprise Agreement (larger customers)

• Google Cloud Commercial Agreement

What if none of the above methods are suitable for you? Remember that even by paying list price, it’s still possible to optimize your spend. Use Cost, Billing and Budget Management services. While this may sound overwhelming, you can stay informed on your cloud spending by following a few simple steps.