[DISCUSSION]: Negotiated Burn-Down Commitment-based Discounts

[ijurica]

Description

Terminology aside, providers offer various Standard and Negotiated, Burn-Down and Build-Up Commitment-based discounts.

---

Since "Burn-Down" and "Build-Up" are not commonly used terms, I am including a brief description of these terms to clarify what I mean by them:

• Burndown (Consumption-based):

  • You purchase a commitment that you then consume (or "burn down") over time. At the end of the Commitment Cycle Interval, any unused commitment expires, and you may receive informative charge records for the unused commitment.
  • various SaaS commitments, (non-funded) OCI Universal Credits, etc.

• Build-Up (Contribution-based):

  • You commit to a spend that you build up over time to fulfill the requirement. Your expenditures (billed costs) accumulate to meet the required commitment (contributing to fulfilling your overall commitment). If you do not meet the commitment, you should expect a true-up payment charge record.
  • Microsoft MACC, AWS EDP

---

Considering that FOCUS 1.1 is limited to Standard Commitment-based Discounts (primarily comes down to RIs and Savings Plans), it no longer specifies what’s expected regarding Negotiated Burn-down Commitments (such as most SaaS commitments, non-funded OCI Universal Credits, etc.)

Proposed Approach

I suggest we address Negotiated Burn-down Commitments, taking into account both SaaS and CSPs. If we decide to pursue this, I believe we should be able to reuse much of the existing specification (the commitment utilization-related columns and attribute).

GitHub Issue or Reference

No response

Context

No response

Data Submission for Discussion

No response

[jpradocueva]

Summary TF-2 call on Oct 16:

#603 [DISCUSSION]: Negotiated Burn-Down Commitment-Based Discounts Key Discussion Items: Handling of negotiated commitment-based discounts (e.g., OCI burn-down discounts) was discussed, with a focus on how to represent them in the specification. Problem Identification: These discounts work similarly to reserved instances and savings plans but require further clarification in the spec. Divergent Views: While some members believed it overlaps with discussions on SaaS billing models, others saw the need for separate treatment. Final Agreement: This issue will be incorporated into broader discussions on SaaS billing models. Action Items: [TF-2-#603] Irena, @ijurica will create a work item to capture this issue for future discussions.