Whether you’re just getting started on public cloud, or you’ve gotten a bill that blew your budget out of the water, it’s a good idea to research ways to get discounts on cloud resources. There’s no reason to pay list price when so many cost-savings measures are available (and your peers are probably taking advantage of them anyway!) Here are my top five ways to get discounts on cloud.
1. Buy in advance
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.
So, will these save you money? That’s a great question. There are several factors that weigh into the answer:
- How much you pay upfront (for example AWS offers all-upfront, partial-upfront, or no-upfront)
- Contract term: 1-year or 3-year term – the longer term will save more, but there’s risk involved in committing for that long
- If the cloud provider cuts their prices during your contract term (and they probably will), you’ll save less
Bottom line: paying in advance can save you money but proceed with caution.
2. Use your resources more
The primary example of “spending more to save more” in the cloud computing world is Google Sustained Use Discounts. This is a cool option for automatic savings since as long as you use an instance for at least 25% of the month, GCP will charge you less than list price.
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 be better to just turn off your resources when you’re not using them.
3. If you’re big: Enterprise Agreements and volume discounts
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. I often hear from 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 investigate:
- AWS Enterprise Agreements
- AWS volume discounts
- Microsoft Azure Enterprise Agreements
- Azure Hybrid Benefits
- Google (see above)
4. If you’re small: startup credits
Each of the major cloud providers offers free credit programs to startups to lure them and get locked in on their services – but that’s not a bad thing. I’ve talked to startups focused on anything from education to location services who have gotten their money’s worth out of these credits while they focus on growth.
If you work for a startup, check out:
- AWS Activate ($1,000-$100,000 in promotional credit)
- Azure Free Accounts (a slew of free credits across services)
- Google Cloud for startups ($3,000-$100,000 in credit)
So far, history tells us that if you wait a few months, your public cloud provider will drop their prices, giving you a built-in discount. If you stick with the existing resource types, rather than flocking to the newer, shinier models, you should be all set. The same AWS m1.large instance that cost $0.40/hour in 2008 now goes for $0.175. Not exactly on pace with inflation!
It’s okay if you don’t get discounts on cloud
What if you’re not a startup, you’re not an enterprise, and you just need some regular compute and database infrastructure now? Should you worry if you don’t get discounts on cloud list prices? No, because even by paying list price, it’s still possible to optimize your spend. Make sure you’re combing through your bill every so often to find orphaned or unused resources that need to be deleted.
Additionally, right-size your resources and turn them off when you’re not using them to pay only for what you actually need. You’ll save money, even without a discount.
Jay Chapel is CEO of ParkMyCloud