how do committed-use discounts work?

[BillGuyTheScien]

How do committed-use discounts work for Databricks?  Do I purchase a chunk of DBUs for a flat fee and then draw down on them until exhausted?  Or am I purchasing a % discount to all DBUs I use until the time period ends?

In either case, is this reflected in the billable usage log downloads?

[Kaniz_Fatma]

Hi @BillGuyTheScien, Let me explain how committed-use discounts work for Databricks.

1. Committed-Use Discounts (CUDs):

   • When you commit to certain levels of usage, Databricks offers you discounts. The larger your usage commitment, the greater the discount compared to pay-as-you-go pricing.
   • These discounts are flexible and can be applied across multiple clouds.
   • Essentially, you’re committing to a specific amount of usage, and in return, you get cost savings.

2. How It Works:

   • You don’t purchase a fixed chunk of DBUs upfront. Instead, you commit to using a certain amount of Databricks resources (DBUs) over a specified period (e.g., monthly or annually).
   • The committed usage can be spread across various Databricks services and workloads.
   • As you use Databricks, the committed usage is drawn down. You’re billed based on the committed level, not the actual usage.
   • If you exceed the committed usage, any additional usage is billed at the standard pay-as-you-go rate.

3. Billing and Usage Logs:

   • The committed usage and associated discounts are reflected in your billing statements.
   • When you download the billable usage logs, you’ll see details about the committed usage and the corresponding discounts applied.
   • These logs provide transparency into how your committed usage aligns with actual usage.

[BillGuyTheScien]

Thanks @Kaniz_Fatma that helps!  

What is the commitment term?  one month? one year?