Cloud Discount Mechanisms 2026: Savings Plans vs RIs vs CUDs vs SUDs
Every cloud provider has a different discount model with different trade-offs. This is the decision guide for how to buy cloud capacity to save the most.
All Discount Mechanisms
| Mechanism | Provider | Max Discount | Commitment | Flexibility |
|---|---|---|---|---|
| Savings Plans (Compute) | AWS | 66% | 1-3 year hourly spend | Flexible across families, sizes, OS, regions |
| Savings Plans (EC2) | AWS | 72% | 1-3 year hourly spend | Locked to family and region |
| Standard RI | AWS | 72% | 1-3 year, specific config | Locked to configuration. Limited modification. |
| Convertible RI | AWS | 66% | 1-3 year | Exchangeable for different instance types |
| Reserved Instances | Azure | 72% | 1-3 year, specific config | Size flexibility within same series |
| Savings Plans | Azure | 65% | 1-3 year hourly spend | Flexible across families and regions |
| Committed Use Discounts | GCP | 70% | 1-3 year | Commit to vCPU/memory quantities |
| Sustained Use Discounts | GCP | 30% | Automatic | Fully flexible. Zero commitment required. |
| Spot Instances | AWS | 90% | None | Interruptible. 2-minute notice. |
| Spot VMs | Azure | 90% | None | Interruptible. Eviction-based. |
| Preemptible / Spot | GCP | 80% | None | Preemptible: 24-hr max. Spot: no limit. |
Decision Framework
Is the workload stable for 1+ years?
Use commitment discounts. AWS: Compute Savings Plans for flexibility, EC2 Instance SPs for maximum discount. Azure: Reserved Instances. GCP: Committed Use Discounts (but check if SUDs already cover enough).
Do you need flexibility across instance types?
AWS/Azure Savings Plans. They commit to hourly spend, not specific configurations. GCP CUDs commit to vCPU/memory quantities rather than machine types.
Want maximum possible discount on a known config?
AWS Standard RI (72%) or Azure RI (72%). Locked to specific configuration but deepest discount. Only if you are confident the workload will not change.
Is the workload fault-tolerant?
Use Spot/Preemptible. AWS Spot (up to 90%), Azure Spot (up to 90%), GCP Preemptible (up to 80%). Diversify across instance pools to reduce interruption risk.
Does usage vary month to month?
GCP SUDs are ideal: they apply automatically with no commitment. On AWS/Azure, avoid over-committing. Consider a conservative 50% coverage with Savings Plans and leave the rest on-demand.
Worked Cost Example: $100,000/month Cloud Bill
Annual cost under different discount strategies.
| Strategy | AWS Annual | Azure Annual | GCP Annual |
|---|---|---|---|
| No discounts (baseline) | $1,200,000 | $1,200,000 | $1,200,000 |
| GCP SUDs only (automatic) | N/A | N/A | $960,000 (20% off) |
| 70% RI/SP coverage | $756,000 (37% off) | $768,000 (36% off) | $744,000 (38% off) |
| 70% RI/SP + 20% Spot | $612,000 (49% off) | $624,000 (48% off) | $636,000 (47% off) |
| Best-case blended | $588,000 (51%) | $576,000 (52%) | $600,000 (50%) |
Blended rates assume 70% committed, 20% Spot, 10% on-demand. Azure best-case includes Hybrid Benefit on 30% of Windows workloads.
Common Mistakes
Buying too many commitments
Start at 50-60% coverage. Increase only after validating utilisation for 3 months. Stranded capacity is wasted money.
Not reviewing RI utilisation
Check RI/SP utilisation monthly. Under 80% utilisation means you over-committed. Modify or exchange if possible.
Ignoring Spot for eligible workloads
Any stateless, fault-tolerant workload should run on Spot first. The 60-90% discount is too large to ignore.
Committing before rightsizing
Rightsize instances first. Committing on oversized instances locks in waste. Optimise configuration, then commit on the right-sized fleet.
Enterprise Agreements
| Provider | Program | Threshold | Typical Discount |
|---|---|---|---|
| AWS | Enterprise Discount Program (EDP) | $1M+/year | 5-20% off all spend. Stacks with other discounts. |
| Azure | Enterprise Agreement (EA) | $1M+/year | 5-15% off. Best combined with Hybrid Benefit. |
| GCP | Negotiated Contract | $500K+/year | 5-15% off. Lower threshold than AWS/Azure. |