January 2023
Intermediate to advanced
456 pages
12h 39m
English
Content preview from Cloud FinOps, 2nd Edition
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Chapter 17. Understanding Commitment-Based Discounts
Commitment-based discounts are a perfect example of the collaborative, data-driven decision making of FinOps. They bridge the gap between technology teams and finance teams, requiring alignment that can be challenging to achieve. However, when alignment is reached, commitment-based discounts can bring a significant cost efficiency advantage in the form of improved cloud unit economics, giving you the same compute power for a big discount.
Note
This chapter is one of the most likely to become out of date—probably before this book even makes it to market—as there are always new updates to cloud provider offerings. We suggest checking the details in this chapter against what your cloud service provider is currently offering. Fear not, though: while there have been many changes to offerings over the years, the core best practices around reservations remain consistent.
Introduction to Commitment-Based Discounts
Reserved Instances (RIs), Savings Plans (SPs), Committed Use Discounts (CUDs), and Flexible Committed Use Discounts (Flexible CUDs), collectively known as commitment-based discounts, are the most popular and important cost optimizations that cloud service providers offer. This is because commitment-based discounts represent the largest percentage discount you can achieve in cloud and often apply to the largest areas of cloud spend in your bill.
Note
This chapter focuses primarily on commitment-based discounts for compute ...
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O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.