Kubernetes notwithstanding, GCE VM instances are likely to remain an integral part of your organization's cloud strategy for the foreseeable future. Because you are certain to be using a lot of VM instances, you should invest the time to understand how exactly discounts on their usage work.

There are basically two major types of discounts currently available for VMs: sustained use and committed use discounts. Committed use discounts require you to make upfront commitments about how much you will use your VM instances, so if you really know, you will need some specific compute power; by all means, go ahead and make that commitment. Beware, always, of making such commitments. The cloud providers offer such discounts in the hope that users will overestimate their need and end up overpaying.

Sustained use discounts, on the other hand, are a lot more worthwhile. The basic idea here is: the GCP will combine all of your usage of VM instances of the same standard machine type, in the same project, and in the same zone, and apply a discount based on the total usage as if this were one, giant VM instance.

There is a lot of fine print in there that is worth understanding.

• The sustained use discount does not require any upfront commitment; it is automatically applied based on your actual usage.
• The discount applies for all VMs of the same standard type, in the same project, and in the same zone. This makes sense because VMs with these shared properties are in a sense fungible, they help GCP with capacity planning.
• Discount calculation for custom machine types is a bit different than for the standard machine types. So, there is a sustained use discount for custom machine types as well, but it is less likely to save you a ton of money.