Customers minimize their cloud bill using Commitments (also termed Subscriptions). During the Blue Review process, a Strategic Blue Cloud Expert will have worked with the customer to ascertain any upcoming technical changes that are to be made, and will then rerun our analytics to identify candidate Commitments.
A (Strategic Blue) Commitment is a commitment to pay for a fixed quantity of particular Cloud Resources, every hour during a specified Delivery Term at a fixed price, or at an agreed percentage of the published on-demand price. The details of the commitment are summarised in a Commitment Letter that contractually adjusts the default pricing agreed in the Cloud Purchase Agreement.
The difference between a Commitment and a Reserved Instance is that it is much more customisable. Customers work with our Financial Solution Architects to optimally tailor any or all of the following to match their forecast usage and procurement needs:
- Cloud Resources to be included
- Start Date for the Delivery Term (including dates in the future)
- End Date for the Delivery Term
- Payment terms – prepay, postpay, or a mixture
- Currency of fixed price (to remove FX risk)
Our Commitment Pricing Engine takes these variables and produces a Commitment Letter describing the terms of the Commitment, together with a Fixed Price or Percentage applicable. We provide that the Fixed Price matches, or improves on, any equivalent direct from Vendor web pricing.
Most customers regularly request an updated Blue Review (as per the relevant Full Blue or Lite Blue services schedule) in order to obtain new commitment candidates.
Commitments are described and agreed to using a Commitment Letter, such as the attached example.