What is a Commitment-based discount?

A commitment-based discount is a pricing model where customers commit to using a certain amount of cloud resources for a specified period in exchange for lower prices as compared to pay-as-you-go rates.

Commitments

A commitment is the vendor agnostic, shorthand term used to describe these discounts across Cloudability.

Commitment Type

A commitment type is the Cloudability term chosen to describe the different offerings of these discounts. We have chosen to use the term type to differentiate the pricing model from the underlying service name. As such, using Amazon Elastic Compute Cloud (AWS EC2) as example, there are three commitment types that can cover the underlying EC2 service spend: EC2 Reserved Instances , EC2 Savings Plans , and Compute Savings Plans .

Commitments can come in a variety of forms but typically are rectified hourly and are made for 1 or 3 year terms. Commitments can also be made through committing to a specific resource, such as a m5.large instance in the useast-1 region, or to a specific amount of spend, typically in dollars. The primary services covered by commitments across the three major cloud service providers are compute and database usage, however these contacts now cover many services beyond these core services.