From what I understand about the E2 instances, the point is that there's often a lot of idle CPU cores compared to the vCPUs that have been allocated by users. That observation in combination with live-migration and larger host machines, it becomes possible to over-sell CPU cores in a way that users won't notice except in tiny ways in around 1 in 100 or 1,000 occasions. That makes great sense. Larger instances mean that you'll be more likely to handle spikes and live-migration means that you can balance people who are actually using the CPU a lot.

What's the payoff for me? Paying less! Except that without sustained-use discounts, I'm not paying less. What strikes me as odd is that people getting the sustained-use discount are probably the people you'd want ton E2 instances. If someone is running a web server and ends up leaving you with a lot of idle CPU, that's really good for Google. That means that they're leaving a lot of unused space where you can schedule other VMs. At least to me, it seems like the people most likely to have empty space are the sustained-use people.

Who is likely to have the least unused space? The people paying by the second/hour. If I spin up a VM to do a video encoding task and then terminate it, I'm not leaving a lot of empty CPU that can be filled by other VMs.

That's why I find it so curious that there's no sustained-use discount for the E2 instances. People leaving relatively idle VMs running in a sustained way seems ideal for this kind of scheduling. Lots of companies are going to have workloads that, well, are less than efficient. For example, a task worker that gets around 6 tasks per hour and takes a minute per task. It's leaving around 90% of the requested CPU idle.

I guess the question is: why would anyone running with a sustained-use discount switch from an N1 instance to an E2 instance? The blog article sounds amazing: "we've found lots of CPU you aren't using that we re-use and pass the savings on to you!" Then it seems less fun: yea, you know how you're running a web server that's idle a lot? We'll re-use all that idle CPU, but you won't get a discount.

The weird thing is that Google is offering a ~30% discount for everything except sustained-use. You've noted the on-demand discount. A 1-year committed E2 price is 30% off the 1-year committed N1 price. The 3-year commitment is the same. So, it doesn't seem to be the case that Google found that there was a lot of idle CPU in on-demand VMs, but not in sustained-use VMs. It could certainly be that my expectation that long-running VMs would use less average CPU than short-running VMs is wrong, but Google isn't pricing it that way for the 1 and 3-year committed pricing.

Given that N2 instances lowered the sustained-use discount from 30% to 20% and the E2 instances have no sustained-use discount, it seems like Google is re-thinking whether it wants to offer sustained-use discounts. That's a pity to me. Sustained-use discounts drew me to Google Cloud over AWS. Google Cloud's offering said to me: "we get that a lot of people are using our VMs in a sustained way for long times and we'll automatically apply a discount for you without requiring you to sit in meetings determining how you want to allocate things." Committed-use discounts were great on top of that, but making sure that people didn't end up paying the on-demand price just because they didn't spend their time pre-allocating capacity was just such a consumer-friendly move and a key pricing differentiator with AWS.

It's also a bit odd that it means the committed-use discounts are so much higher over sustained-use. Like, I save ~10% by going with a 1-year commitment on an N1 and ~36% with a 3-year commitment (compared to just leaving them on). So, there isn't a huge benefit to going with a 1-year commitment on N1 instance (not that 10% can't be very beneficial). On the E2s, it's quite big - a ~37% discount for a 1-year commitment and a ~55% discount for 3-years. Frankly, those seem like AWS reserved-instance numbers and mean I'd really want to pre-allocate if I were going with E2 instances.

If the E2 instances got a 30% sustained-use discount like the N1 instances, Google could be undercutting AWS by around 50% for that use case. No pre-planning, no commitment, no meetings where people worry about buying something they won't use. Just half-price. It's basically the same savings you'd get if you did a 3-year commitment at AWS (with zero upfront), but without the pre-planning.

Instead, it makes me wonder if Google is really committed to the sustained-use discounts or if I'll have to start doing extra planning.