Looking for the best cloud provider for your compute needs? Here's a quick breakdown of how AWS, Azure, and Google Cloud stack up in terms of pricing and features:

• AWS: Flexible pricing options with Savings Plans and Spot Instances offering up to 90% savings. Ideal for businesses with diverse workloads and a need for flexibility.
• Azure: Best for Microsoft-integrated environments. Offers strong savings through Reserved Instances and Hybrid Benefits, but often priced higher for general-purpose workloads.
• Google Cloud: Competitive pricing with automatic Sustained Use Discounts and straightforward billing. Great for businesses prioritizing simplicity and AI/analytics workloads.

Quick Comparison

Feature	AWS	Azure	Google Cloud
Small Instance (2 vCPUs, 8 GB RAM)	$69/month	$70/month	$52/month
Max Savings (Reserved/Committed)	Up to 72%	Up to 72%	Up to 70%
Spot/Preemptible Discounts	Up to 90%	Up to 90%	Up to 91%
Billing	Per second (Linux, 60s min)	Per minute (some per second)	Per second (1-minute min)
Best For	Flexible workloads	Microsoft integration	Simplicity, sustained usage

Key takeaway: AWS offers flexibility, Azure excels with Microsoft tools, and Google Cloud is the most cost-effective for many configurations. Choose based on your workload, budget, and ecosystem needs.

AWS, Azure, or Google Cloud: Which One is Best for YOUR Needs?

Cloud Compute Pricing Models Explained

Cloud compute pricing revolves around three main models designed to accommodate different types of workloads.

Pay-as-You-Go Pricing

Pay-as-you-go pricing allows businesses to pay only for the resources they actually use. This model eliminates upfront costs and provides flexibility, especially for workloads with unpredictable demands.

Billing methods vary by provider, which can influence overall costs. For example:

• Google Cloud bills per second for all VM instances, ensuring precise charges for the exact time used.
• AWS also offers per-second billing for EC2 Linux instances, with a 60-second minimum.
• Azure primarily bills per minute but offers limited per-second billing options.

Here’s how pricing compares across providers for similar configurations:

Provider	Small Instance (2 vCPUs, 8 GB RAM)	High-End Instance
AWS	$69/month	3.84 TB RAM, 128 vCPUs – $3.97/hour
Azure	$70/month	3.89 TB RAM, 128 vCPUs – $6.97/hour
Google Cloud	$52/month	3.75 TB RAM, 160 vCPUs – $5.32/hour

Among these, Google Cloud typically offers the lowest prices, while Azure may be more cost-effective for large enterprises. AWS, on the other hand, is often considered more user-friendly for those new to cloud services.

For workloads requiring long-term commitments, reserved and committed pricing models provide additional savings.

Reserved and Committed Instances

Reserved and committed instances are ideal for predictable, high-volume workloads, offering significant discounts in exchange for one- or three-year commitments.

• AWS provides Savings Plans and Reserved Instances, which can reduce costs by up to 72%.
• Azure offers Reservations with savings of up to 72% and Savings Plans that cut costs by up to 65%.
• Google Cloud features Committed Use Discounts (CUDs) with up to 55% savings and Sustained Use Discounts (SUDs) that automatically apply up to 30% savings without requiring a commitment.

Flexibility and cancellation policies differ between providers:

Feature	AWS	Azure	Google Cloud
Payment Options	No upfront, partial upfront, or all upfront	All upfront only	No upfront payment required
Cancellation Policy	Reserved Instances can be resold on Marketplace	12% cancellation fee applies	No cancellation allowed
Flexibility	High (covers multiple instance types/regions)	Moderate (specific resources)	Moderate (CUDs tied to project/region)

For workloads that can handle interruptions, spot and preemptible instances provide another way to save.

Spot and Preemptible Instances

Spot and preemptible instances offer steep discounts but come with the risk of interruptions when the provider reclaims capacity.

• AWS Spot Instances can be up to 90% cheaper than on-demand pricing.
• Google Cloud Spot VMs deliver up to 91% cost savings, with price adjustments happening no more than once a month.
• Azure Spot VMs provide comparable discounts and similar interruption risks.

These options are particularly suited for tasks like batch processing, data analysis, CI/CD pipelines, or web servers where occasional downtime is acceptable. To minimize disruption, it's essential to implement strategies like checkpointing and automated failover.

In scenarios such as development, testing, or batch processing, the cost savings of spot instances often outweigh the added complexity of managing interruptions. Proper planning can help you strike the right balance between cost efficiency and operational reliability.

AWS Compute Pricing Breakdown

AWS provides three main compute pricing models designed to meet a variety of business needs and workload patterns. Here's a closer look at how AWS structures its pricing to accommodate different use cases.

On-Demand Instance Pricing

With On-Demand Instances, you pay by the hour or per second (with a 60-second minimum), all without any long-term commitments. This pricing model is ideal for unpredictable traffic spikes or short-term projects. For Linux instances, billing is per second, allowing for precise cost control, while Windows instances are generally billed hourly. Though this option is more expensive compared to committed pricing models, it's a great fit for development environments and temporary workloads. Essentially, it aligns with the pay-as-you-go approach, offering maximum flexibility.

Reserved Instances and Savings Plans

For businesses with consistent, predictable workloads, AWS offers discounted pricing through Reserved Instances and Savings Plans. Reserved Instances can provide savings of up to 72% compared to On-Demand pricing, while Savings Plans offer reductions of up to 66% for Compute Savings Plans and up to 72% for EC2 Instance Savings Plans. AWS often suggests Savings Plans over Reserved Instances due to their similar savings potential and greater flexibility. Both options require a commitment of one or three years, with varying payment options (All Upfront, Partial Upfront, or No Upfront). The more you pay upfront, the greater your overall savings.

Feature	Reserved Instances	Savings Plans
Maximum Savings	Up to 75% (Standard RIs)	Up to 72% (EC2 Instance Plans)
Flexibility	Limited to specific instance types	Applies across instance families
Capacity Reservation	Included by default	Available through separate reservations
Best For	Steady, predictable workloads	Variable workloads with consistent spend

Reserved Instances are particularly useful for mission-critical applications requiring guaranteed capacity, especially within specific Availability Zones. On the other hand, Savings Plans are better suited for businesses with evolving infrastructure needs or diverse application requirements.

Spot Instances and Free Tier

For workloads that can handle interruptions, AWS offers Spot Instances alongside a Free Tier for new users.

Spot Instances allow you to take advantage of unused AWS compute capacity at discounts of up to 90% compared to On-Demand prices. However, these instances can be interrupted with a 2-minute warning when AWS needs to reclaim capacity. They are best suited for fault-tolerant tasks like batch processing, data analysis, CI/CD pipelines, and distributed computing. To minimize disruptions, implementing checkpointing and automated failover strategies is highly recommended.

AWS Free Tier

The AWS Free Tier provides a cost-free entry point for beginners and small-scale applications. For the first 12 months, you get 750 hours per month of Linux, RHEL, or SLES t2.micro or t3.micro instance usage. The same allocation applies to Windows t2.micro or t3.micro instances, along with 750 hours per month of public IPv4 address usage. This monthly allocation doesn’t roll over, making it perfect for learning AWS services, developing applications, or running small production workloads. After 12 months or once the free limits are exceeded, standard On-Demand pricing kicks in.

Azure Compute Pricing Breakdown

Azure's pricing structure aligns with industry norms while offering distinct advantages for those already embedded in the Microsoft ecosystem. This integration provides seamless compatibility with Microsoft products, making Azure an appealing choice for organizations leveraging the broader Microsoft suite.

On-Demand VM Pricing

Azure's Pay-As-You-Go model charges by the second, offering precise cost control for workloads with unpredictable or short-term demands. This flexibility is ideal for development environments, testing scenarios, or applications with fluctuating requirements. While this model provides maximum adaptability - requiring no long-term commitments or upfront payments - it generally comes at a higher cost compared to reserved pricing options.

Reserved VM Instances

For workloads with consistent resource needs, Azure Reserved VM Instances can deliver savings of up to 72% compared to Pay-As-You-Go pricing. These reservations require a one- or three-year commitment to a specific region and VM size. Reserved Instances also provide prioritized access to compute resources in Azure regions, although absolute capacity availability isn’t guaranteed. This pricing model is particularly suited for steady-state applications, such as databases, web servers, and other mission-critical operations.

For a quick comparison:

Feature	Pay-As-You-Go	Reserved Instances
Cost	Higher per-second rate	Up to 72% savings with commitment
Flexibility	Scale up/down as needed	Limited to specific instance type/region
Commitment	None	1 or 3-year term
Best Use Case	Unpredictable workloads, testing	Predictable, long-term production loads
Capacity	No guaranteed capacity	Prioritized capacity access

Spot VMs and Microsoft Integration Discounts

For workloads that can tolerate interruptions, Azure Spot VMs offer an economical option with discounts of up to 90%. These VMs utilize Azure's surplus capacity and can be interrupted with as little as 30 seconds’ notice when resources are required elsewhere. They’re ideal for fault-tolerant tasks like batch processing, media rendering, big data analysis, and high-performance computing. Spot VMs also integrate seamlessly with Azure Batch pools and VM scale sets, making them a practical choice for containerized and auto-scaling applications, even with the shorter interruption notice compared to AWS’s two-minute warning.

Azure further enhances its value with Microsoft Integration Benefits, a standout feature in its pricing model. The Azure Hybrid Benefit allows customers to apply their existing Windows Server and SQL Server licenses, resulting in savings of up to 85% over Pay-As-You-Go pricing. On average, SQL Server users save 28%, while Windows Server users see savings of 36% when migrating to Azure. A 2024 study comparing sample VMs (e.g., StandardB2ms, StandardD2sv3, and StandardD4s_v3) across regions like US West (Oregon), Frankfurt, and Paris highlighted Azure’s cost advantage when leveraging the Azure Hybrid Benefit compared to similar AWS offerings.

Additional benefits include discounts for Visual Studio subscribers in development and testing environments. Microsoft 365 E5, A5, F5, and G5 customers also gain up to 5 MB per user per day of free data ingestion into Microsoft Sentinel, potentially saving up to $2,200 per month for a typical 3,500-seat deployment. Furthermore, eligible Windows or Microsoft 365 license holders can access Windows 10 and Windows 11 Enterprise desktops on Azure Virtual Desktop without incurring extra licensing costs.

"We want to unburden the DevOps teams using Azure by offering cost-efficient solutions, including Azure Reserved Virtual Machine Instances, dev/test subscriptions, Azure Hybrid Benefit, and commitment tiers."

• Hans De Kruif, Platform Engineer and Azure Cost Manager, ABN AMRO

sbb-itb-aa1ee74

Google Cloud Compute Pricing Breakdown

Google Cloud stands out for its approach to pricing, offering automated discounts and clear billing practices. Unlike some providers that require users to manually sign up for discount programs, Google Cloud applies many cost-saving measures automatically. This makes it easier for businesses to manage their cloud expenses effectively.

On-Demand and Committed Use Discounts

Google Cloud's on-demand pricing uses a straightforward pay-as-you-go model. For example, an n1-standard-1 machine type in the U.S. costs around $0.10 per hour. This flexibility is especially useful for workloads that vary, like development or testing environments.

For businesses with steady usage patterns, Committed Use Discounts (CUDs) can lead to major savings. By committing to a one- or three-year usage plan, organizations can save up to 57% compared to on-demand rates. Certain configurations offer even deeper discounts - up to 70% for memory-optimized machines and up to 55% for other setups. CUDs come in two types:

• Spend-based: Commit to a minimum dollar amount for usage.
• Resource-based: Commit to specific machine configurations.

This predictable pricing structure simplifies long-term budget planning. For workloads that can handle interruptions, Google Cloud also offers interruptible instances.

Preemptible VMs and Sustained Use Discounts

Google Cloud provides additional cost-saving options for workloads that are flexible and can tolerate interruptions.

There are two types of interruptible instances: Preemptible VMs and Spot VMs. Both offer steep discounts, with Spot VMs providing savings of up to 91% compared to regular on-demand pricing. Preemptible VMs can run for up to 24 hours, while Spot VMs do not have a fixed runtime. However, it’s worth noting that Google Cloud Spot VMs give only a 30-second interruption notice, compared to the two-minute warning offered by AWS Spot Instances. This shorter notice requires applications to shut down quickly.

Another standout feature is Google Cloud’s Sustained Use Discounts (SUDs). These discounts apply automatically to Compute Engine and Google Kubernetes Engine resources used for more than 25% of a billing month. The longer you use these resources, the bigger the discount:

• N2, N2D, and C2 machine types: Discounts max out at 20%.
• N1, M1, and M2 machine types: Discounts can go up to 30%.

Here’s an example of how SUDs work:

Usage Level	Standard Cost ($/hour)	Discounted Cost ($/hour)	Effective Average Cost	Overall Discount
0–25% of month	$0.0475	$0.0475 (100%)	$0.0475	0%
25–50% of month	$0.0475	$0.038 (80%)	$0.04275	10%
50–75% of month	$0.0475	$0.0285 (60%)	$0.038	20%
75–100% of month	$0.0475	$0.019 (40%)	$0.03325	30%

"The key advantage of SUDs is their automatic application. There's no need for upfront commitments or manual enrollment processes. Simply use your VMs, and Google will automatically calculate and apply any discounts based on your usage each month." – ProsperOps

It’s important to note that SUDs don’t apply to VMs created through App Engine environments or Dataflow. They also can’t be combined with resources already covered by committed use discounts.

Free Tier and Billing Policies

Google Cloud complements its discount programs with a free tier and straightforward billing policies, making cost management even easier.

The free tier is a great starting point for new users or small-scale projects. In addition, Google Cloud’s billing policies emphasize fairness and precision. Most compute resources are charged per second after a one-minute minimum, so you only pay for what you actually use.

Direct Pricing and Feature Comparison

Let’s break down the compute pricing for a 2 vCPU/8 GB configuration across the major cloud providers:

• Google Cloud: Around $52/month
• AWS: About $69/month
• Azure: Roughly $70/month.

However, pricing shifts when you dive into specific instance types. For general-purpose instances, Azure is typically the priciest, but it offers better deals for compute-optimized workloads. Google Cloud’s compute-optimized instances may seem more expensive upfront, but they often include twice the RAM compared to similar AWS and Azure options - a big win for memory-heavy applications.

Pricing Models and Discount Programs

Here’s a comparison of the discount programs offered by AWS, Azure, and Google Cloud:

Cloud Provider	Savings Model	Max Discount	Commitment Terms	Flexibility	Coverage
AWS	Savings Plans	Up to 72%	1-3 years	High (flexible across instance types)	EC2, Fargate, Lambda
AWS	Reserved Instances	Up to 72%	1-3 years	Medium (limited to instance families)	EC2
Azure	Savings Plan	Up to 65%	1-3 years	High (dynamic usage)	Compute services
Azure	Reservations	Up to 72%	1-3 years	Medium (specific VMs, SQL Databases)	VMs, SQL Database
Google Cloud	CUDs (Committed Use Discounts)	Up to 70%	1-3 years	Medium (project-specific)	Compute Engine, GKE
Google Cloud	SUDs (Sustained Use Discounts)	Up to 30%	Monthly	High (automatic)	Compute Engine

Arm CPUs are another area where costs differ significantly. Across all three providers, Arm CPUs are more cost-effective than x86 CPUs. Azure stands out the most, with Arm CPUs priced 65% lower for on-demand usage and 69% lower for spot instances compared to x86.

When it comes to spot and preemptible instances, all providers offer considerable savings, but there are operational differences. AWS Spot Instances give you up to 2 minutes of interruption notice, while both Azure Spot VMs and Google Cloud Spot VMs provide only 30 seconds. That shorter notice can make shutdowns more challenging to handle.

Pros and Cons of Each Provider

To make sense of these offerings, here’s a closer look at the strengths and trade-offs of each provider:

• AWS: Known for its flexibility, AWS Savings Plans let you apply discounts across instance families, operating systems, and regions. The 2-minute interruption notice for spot instances is the longest among the three, giving you more time to manage shutdowns. However, spot pricing can be unpredictable, as it fluctuates with supply and demand.
• Azure: A strong choice for hybrid setups and organizations using Arm processors. Azure offers competitive pricing for compute-optimized workloads and integrates seamlessly with Microsoft technologies. It also allows cancellations for reserved instances (with restrictions), adding some flexibility. On the downside, Azure is often the most expensive for general-purpose computing.
• Google Cloud: Designed for simplicity and automation, Google Cloud applies Sustained Use Discounts automatically - no setup required. With per-second billing after the first minute, you pay only for what you use. Base pricing is competitive for standard configurations, but the platform’s 30-second interruption notice for spot instances is the shortest, and committed use discounts are non-refundable once activated.

Key Takeaways

Each provider has its strengths, depending on your workload and budget needs. If flexibility and manual cost management are priorities, AWS is a solid choice. For businesses tied to Microsoft tools or those exploring Arm-based computing, Azure offers clear benefits. Meanwhile, Google Cloud shines for organizations that value automated cost controls and predictable billing, especially for workloads that can take advantage of sustained use discounts.

The decision ultimately comes down to aligning the pricing model with your specific workload patterns and financial goals.

Conclusion: Selecting the Right Compute Pricing Model

Choosing the best compute pricing model requires a careful balance between your workload demands and financial goals. With nearly half of cloud-based businesses - 49% to be exact - struggling to manage cloud costs effectively, and inefficiencies putting substantial spending at risk, making an informed decision can lead to considerable savings over time.

For businesses with variable workloads, Google Cloud stands out. Its automatic Sustained Use Discounts and per-second billing after the first minute can be game-changers, especially when 75% of organizations report increasing cloud waste. These features help ensure you're only paying for what you truly use.

If your organization has complex computing needs, AWS offers unmatched flexibility. Its extensive service catalog, along with Savings Plans that adapt across instance families and regions, provides versatility. Add to that AWS Spot Instances, which can slash costs by up to 90%, and it becomes a strong contender for businesses with diverse requirements.

For companies deeply integrated into Microsoft ecosystems, Azure is the go-to choice. Its hybrid benefits and Reserved Instances deliver substantial cost reductions, making it a natural fit for Microsoft-centric environments.

Each pricing model - whether on-demand, reserved, or spot - comes with its own trade-offs that directly influence your cloud spending. To ensure you’re optimizing costs, consider strategies like enabling autoscaling to match resource use with demand, scheduling services to shut down during idle periods, and conducting regular audits to eliminate unused resources. A multi-cloud approach can also be highly effective: use AWS for complex enterprise workloads, Google Cloud for AI and data analytics, and Azure for seamless Microsoft integration.

With the cloud market expected to reach $2.43 trillion by 2030, having a tailored compute pricing strategy now can lead to compounded savings in the long run. By understanding your workload patterns, forecasting resource needs accurately, and aligning pricing models with your business trajectory, you can maximize value and stay ahead in the cloud game.

FAQs

How do AWS, Azure, and Google Cloud compare in pricing for businesses with changing workloads?

For businesses dealing with shifting workloads, AWS offers a pay-as-you-go pricing model that adjusts costs based on usage - perfect for handling unpredictable demand. Similarly, Azure provides on-demand pricing but also includes reserved instance discounts, which can help businesses save when their usage patterns are more consistent. Meanwhile, Google Cloud takes a different approach with automatic sustained use discounts and committed use contracts, lowering costs as usage grows. This combination makes it both scalable and budget-friendly.

While all three providers handle dynamic workloads well, Google Cloud's automatic discounts and Azure's reserved instance options can provide extra cost-saving opportunities, depending on your specific requirements.

What are the key benefits of using spot or preemptible instances on cloud platforms?

Spot and preemptible instances can help cut costs dramatically - sometimes by as much as 90% compared to standard on-demand pricing. These options are perfect for workloads that can scale, giving businesses the ability to adjust resources as needed while keeping expenses in check.

They work especially well for tasks where occasional interruptions are not a problem, like batch processing, testing, or data analysis. By using these instances, you can stretch your cloud budget further without sacrificing performance for the right types of workloads.

How can businesses save on costs using Azure Hybrid Benefits and Reserved Instances?

Businesses can cut down on their Azure expenses by pairing Azure Hybrid Benefits with Reserved Instances. Here's how it works: Azure Hybrid Benefits let you use your existing on-premises licenses for Windows Server and SQL Server, which helps trim costs. Meanwhile, Reserved Instances allow you to lock in one- or three-year commitments for virtual machines and databases at discounted rates.

When used together, these options can slash costs by as much as 80%. This strategy works especially well for companies with steady workloads and a demand for flexible, scalable solutions.

Related posts

• On-Premises vs Cloud Backup: Cost Comparison
• How to Budget for Scalable Cloud Infrastructure
• How Load Balancing Reduces Cloud Costs