Cloud cost
Committed use discount
A discount a provider gives you for committing to a minimum spend or usage level for a fixed term.
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Definition
You promise a baseline of usage or spend for one to three years. In return, the provider prices that baseline well below its on-demand rate. Reserved instances and savings plans are the two AWS versions of this idea. Most major clouds offer an equivalent.
The discount is not the risk. Sizing is. A commitment bought for last year's footprint can sit partly unused as workloads change. So check coverage and utilization on a regular schedule, not only on the day you buy.
Where it shows up
A committed use discount appears as its own charge type on the bill. In AWS Cost Explorer, the Reservations and Savings Plans reports list it apart from the On Demand line for the same instance family. Azure and Google Cloud keep the discounted charge separate from pay-as-you-go usage in their own commitment reports.
What makes it expensive
A commitment sized to last year's footprint and then left alone is where the money goes. Workloads change and the commitment does not follow. Coverage and utilization drift apart, and neither moves back on its own. Put both reports on a fixed schedule. Then you find a stranded commitment while term is still left to act on.
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