[FR] Clarify commitment concepts and glossary entries

[Matt-Cowsert]

🧠 Problem Statement

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.)

Concerns

The FOCUS specification uses the umbrella term Commitment Discount in a way that:

• excludes negotiated agreements
• and assumes a pre-purchased, burn-down style of commitment (see attached glossary definition).

While this may work well — or perhaps it's simply what we're used to — in the context of public cloud, it becomes problematic when applied more broadly, such as to the SaaS scope, because:

• Negotiated discounts also involve customer commitments.
• Negotiated discounts may functionally behave like commitment discounts - they are not limited to build-up models (e.g., AWS EDP, Microsoft MACC), but can also include burn-down models (e.g. OCI Universal Credits).

The fact that, throughout the specification, we repeatedly add explicit clarifications that Commitment Discounts do not refer to Negotiated Discounts indicates that the current terminology does not provide enough clarity on its own. For example:

...The CommitmentDiscountId column is only applicable to commitment discounts and not negotiated discounts...

(Note: Similar disclaimers appear in multiple commitment-discount-related column specifications.)

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Use Cases

As a FinOps Practitioner
I need to understand whether a commitment follows a burn-down or build-up model
So that I can apply the correct utilization tracking, forecasting methodology, and identify whether unused commitment value expires or requires true-up payments

As a FinOps Practitioner
I need to distinguish between standard commitment discounts and negotiated commitment-based agreements
So that I can correctly analyze my commitment portfolio across both public cloud and SaaS providers without confusion about which FOCUS columns apply to which commitment types

As a FOCUS Data Generator
I need clear terminology that differentiates commitment discount types and models
So that I can correctly map my provider's commitment products to FOCUS concepts without ambiguity about whether my offerings are "commitment discounts" or "negotiated discounts"

As a FinOps Tooling Vendor
I need consistent commitment terminology across the specification
So that I can build commitment tracking and optimization features without encountering contradictory definitions or repeated exclusions (e.g., "not negotiated discounts")

As a FOCUS Specification Maintainer
I need commitment terminology that scales across public cloud, SaaS, and other scopes
So that future commitment-related features (like Contract Commitments dataset) can be built on a clear conceptual foundation

Acceptance Criteria

Terminology Clarity:

• Glossary includes clear definitions for "burn-down commitment" and "build-up commitment" models
• Distinction between standard commitment discounts and negotiated commitment-based agreements is unambiguous
• Core commitment terms (Commitment, Commitment Discount, Negotiated Discount) are internally consistent and non-overlapping
• Terminology explicitly addresses both public cloud and SaaS commitment models
• Commitment interval/cycle terminology is defined to support both monthly and annual commitment structures

Specification Consistency:

• Commitment-related column definitions reference updated glossary terms consistently
• Repeated disclaimers (e.g., "not negotiated discounts") are eliminated or significantly reduced where terminology is now self-explanatory
• Normative requirements acknowledge both burn-down and build-up models where applicable
• Appendices and examples use consistent commitment terminology

Cross-Feature Alignment:

• Updated terminology aligns with Contract Commitments dataset (FR [FR] Add support for negotiated discounts via contractual commitments #976)
• Commitment Discount columns clearly indicate scope (standard vs. negotiated)
• Supported features reflect clarified terminology in descriptions

Practitioner Impact:

• Practitioners can identify commitment model type (burn-down vs. build-up) from specification terminology
• Practitioners understand which columns apply to standard commitment discounts vs. negotiated commitments
• Data generators can map provider commitment products to FOCUS concepts without ambiguity
• Reduced need for clarification questions in community discussions about commitment features

Foundation for Future Work:

• Terminology supports expansion to negotiated burn-down commitments (SaaS, OCI Universal Credits)
• Terminology supports expansion to negotiated build-up commitments (AWS EDP, Microsoft MACC)
• Glossary provides foundation for Contract Commitments dataset implementation

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Supported Feature Impact

Enhancement to "Commit Usage and Under Usage" Feature

Current Feature Description:

FOCUS supports the tracking of commitment discounts usage and under usage, which can come in the form of commitment discounts or capacity reservations.

Draft Enhancement - Add Terminology Context:

FOCUS supports the tracking of commitment discounts usage and under usage, which can come in the form of commitment discounts or capacity reservations. The specification distinguishes between burn-down commitments (where unused value expires each period) and build-up commitments (where spend accumulates toward fulfillment requirements). Current support focuses on standard commitment discounts (publicly available, burn-down model), with negotiated commitment support being developed separately (see Contract Commitments dataset).

Rationale: Clarifies that current CommitmentDiscount* columns apply to standard, burn-down model commitments, setting expectations for scope and preparing practitioners for negotiated commitment support via Contract Commitments dataset.

Enhancement to "Contract Commitments" Feature (FR #976)

Current Feature Description (from our earlier work):

FOCUS supports the tracking of commitments made via contractual agreements between a provider and a customer. Each row in the Cost and Usage dataset is associated with one or more unique identifiers representing those contracts and contract commitments, stored in a JSON column called Contract Applied...

Draft Enhancement - Add Commitment Model Terminology:

FOCUS supports the tracking of commitments made via contractual agreements between a provider and a customer. These commitments may follow different models: burn-down commitments where purchased value is consumed over time (with unused amounts expiring), or build-up commitments where spend accumulates toward fulfillment requirements (with true-up payments for shortfalls). Each row in the Cost and Usage dataset is associated with one or more unique identifiers representing those contracts and contract commitments...

Rationale: Incorporates burn-down/build-up terminology directly into the Contract Commitments feature description, providing immediate context for practitioners analyzing negotiated agreements.

Enhancement to "Cost Comparison" Feature

Current Feature Description:

FOCUS supports the comparison of cost columns in order to identify savings, amortization, or other constructs.

Draft Enhancement - Add Commitment Context:

FOCUS supports the comparison of cost columns to identify savings, amortization, or other constructs. Practitioners can analyze savings from both standard commitment discounts (publicly available programs like Reserved Instances and Savings Plans) and negotiated commitment-based agreements (customized contractual commitments), each with distinct discount identification mechanisms in FOCUS data.

Rationale: Helps practitioners understand that savings analysis works across both commitment types but uses different columns (CommitmentDiscountId for standard, ContractApplied for negotiated).

Enhancement to "Effective Cost Analysis" Feature

Current Feature Description:

FOCUS enables practitioners to perform accrual-based cost analysis, representing the cost of resources at the time of actual usage after applying all discounts and the applicable portion of prepaid purchases...

Draft Enhancement - Clarify Commitment Amortization:

FOCUS enables practitioners to perform accrual-based cost analysis, representing the cost of resources at the time of actual usage after applying all discounts and the applicable portion of prepaid purchases. For burn-down commitments (e.g., upfront Reserved Instances), EffectiveCost distributes the prepaid amount across usage periods. For build-up commitments (e.g., annual spend agreements), EffectiveCost typically equals BilledCost as there is no prepayment to distribute.

Rationale: Clarifies how EffectiveCost behaves differently for burn-down vs. build-up commitment models, addressing a common point of confusion.

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🎯 Desired Outcome / Practitioner Impact

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 attributes).

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📨 Type of Request

• Refinement of an existing FOCUS attribute
• Addition of a provider-supported field not yet in FOCUS
• Net-new concept (not currently supported by providers or FOCUS)
• Supporting Content (e.g., appendices, use cases)

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🏛️ Organizations Requesting or Supporting This Feature

• Neos

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🌐 FinOps Scope Alignment (Optional)

• Public Cloud – e.g., AWS, Azure, GCP, OCI

• Software-as-a-Service (SaaS) – e.g., Salesforce, Snowflake

• Data Center – on-prem compute and infrastructure

• Licensing – subscription or usage-based licensing models (under development)

• AI – cost and usage for AI models and platforms (under development)

• Custom – internal tooling, specialized infra (under development)

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📊 Impacted Parties

• FinOps Practitioner – end users who analyze or act on the data

• FOCUS Data Generator – providers generating output aligned to the spec

• Vendor Supporting FOCUS – vendors or tools ingesting the spec or using the spec language in their UI

• Other (please explain in comments)

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🌫️ Level of Ambiguity

How clearly defined is the request? Rate from 1 to 5:

• 1 = very well-defined, low complexity
• 3 = moderately scoped, some ambiguity
• 5 = vague, high complexity or conceptual

3

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📂 Supporting Documentation

Existing Glossary Definitions, relevant for this FR

Commitment
A customer's agreement to consume a specific quantity of a service or resource over a defined period, usually also creating a financial commitment throughout the entirety of the commitment period. Some commitments also hold Providers to certain assurance levels of resource availability.

Commitment Discount
A billing discount model that offers reduced rates on preselected SKUs in exchange for an obligated usage or spend amount over a predefined term. Commitment discount purchases, made upfront and/or with recurring monthly payments, are amortized evenly across predefined charge periods (i.e., hourly), and unused amounts cannot be carried over to subsequent charge periods. Commitment discounts are publicly available to customers without special contract arrangements.

Negotiated Discount
A contractual agreement where a customer commits to specific spend or usage goals over a term in exchange for discounted rates across varying SKUs. Unlike commitment discounts, negotiated discounts are typically more customized to the customer’s account, can be utilized at varying frequencies, and may overlap with commitment discounts.

Additional motivation for change

Given that we are actively considering expanding support for negotiated commitments (FR #976 ) - including:

• Negotiated Commitment purchases
• Tracking of Negotiated Commitment consumption in burn-down models
• Tracking of Negotiated Commitment fulfillment in build-up models

…it becomes necessary to:

• Introduce new terms in the glossary to capture broader range of commitment-based discount models

  • e.g., negotiated burn-down, negotiated build-up, and potentially non-negotiated build-up commitments.
  • Note: additional glossary entries (e.g. commitment interval) might also be required.

• Revisit the existing glossary definitions for Commitment, Commitment Discount, Negotiated Discount in order to reduce confusion, improve precision, and align the terminology more closely with real-world discount models across providers.

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🛠️ Proposed Solution / Approach

TBD

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💬 Community Support (Add Your Voice)

If your organization supports this request or has a similar use case:

• Add a comment below including:
  • Your organization
  • A brief explanation of why this is important to you (e.g., use case, urgency)
• FOCUS Staff & Maintainers will aggregate supporting orgs over time.

[shawnalpay]

@ijurica @cnharris10 How do you perceive this to overlap with #976 (which is the new FR for WI #666)? What can/should we do to delineate or merge?

[shawnalpay]

@ijurica to add example(s) of where the glossary and other places in the spec are incomplete and/or ambiguous.