Skip to main content

Commitment Planning

This playbook helps FinOps, finance, and platform teams run a recurring planning process for cloud commitments and reservations, such as AWS Reserved Instances and Savings Plans, Azure Reservations, Google Cloud committed use (CUD) discounts, and similar pricing constructs.

Use it when you need to evaluate current coverage and utilization, forecast future baseline usage, prepare purchase recommendations, and monitor whether commitments continue to deliver expected savings.

Set Planning Cadence and Scope​

  • Choose a cadence (for example, quarterly, with monthly reviews).
  • Decide which providers, services, and scopes (BU, app, customer) are in scope.
  • Align the cadence with your budgeting and contract renewal cycles.

Assess Current Coverage and Utilization​

  • Use commitment dashboards and reports to review:
    • Coverage and utilization by provider, service, and region.
    • Effective cost vs. on‑demand cost for key workloads.
    • Under‑utilized or expiring commitments.
  • Identify areas with:
    • High, stable usage but low coverage (opportunity).
    • Low utilization of existing commitments (risk).

See Commitments & Reservations for KPIs and concepts.

Forecast Future Usage​

  • Combine Cost Management forecasts with input from:
    • Product and engineering teams (planned launches, migrations, decommissions).
    • Platform teams (infrastructure changes, new regions or services).
  • Produce baseline and high/low scenarios for the next 12–36 months where commitments are considered.

Design Commitment Recommendations​

For each major workload or scope:

  • Choose appropriate commitment types and terms (for example, 1‑year vs. 3‑year, instance‑based vs. flexible).
  • Consider portability and architectural plans (containerization, serverless, region expansion).
  • Document proposed purchases, expected savings, and key assumptions.

Engage finance and procurement early if large or multi‑year commitments are being considered.

Execute and Track​

  • After approvals, execute purchases in the respective cloud portals.
  • Update documentation in internal systems to reflect:
    • What was purchased.
    • For which scopes and assumptions.
  • Monitor coverage, utilization, and effective cost regularly to ensure commitments behave as expected.

Review and Iterate​

On each planning cycle:

  • Compare actual usage and savings to previous projections.
  • Adjust strategy where patterns have changed (for example, workloads moved, usage flattened, or grew faster than expected).
  • Feed lessons learned into future commitment planning, budgeting, and architecture decisions.

Over time, a disciplined commitment planning process can deliver substantial savings and reduce surprise bills, while remaining flexible enough to accommodate change.