Cloud commitment discounts
Discounted cloud rates in exchange for spend or capacity commitments — reserved instances, savings plans, and committed use discounts.
Updated 2026-05-23 · 3 min read
Definition
Cloud commitment discounts are pricing mechanisms where organizations commit to a level of spend or capacity over a term (typically one or three years) in return for lower unit rates — including AWS Reserved Instances and Savings Plans, Azure Reservations, and GCP committed use discounts.
Why it matters
Low commitment coverage means predictable workloads pay on-demand rates — often 30–60% higher than necessary. The wrong commitment type also shifts forecast risk to IT for years when demand changes.
Related Terms
Savings Plans
A flexible commitment discount covering a steady compute spend rate (USD/hr) across instance families, regions, and sometimes services.
Reserved Instance
A commitment-based discount on cloud compute in exchange for a 1- or 3-year term — typically 30–60% off on-demand pricing.
Cloud financial management
The discipline of governing cloud spend — visibility, allocation, commitments, optimization, and accountability across engineering and finance.