Reserved Instance Amortization and MCA Support With New Azure Integration

Today we are proud to announce that Apptio Cloudability is the first Cloud Cost Management solution to fully support Azure’s next-generation billing framework launched in November 2020. Integration with the Cost Management Billing Export makes it straightforward for enterprises on a Microsoft Customer Agreement (MCA) to ingest billing data into Cloudability and benefits all Apptio customers with additional capabilities such as amortizing and allocating reservation purchases to precisely when and where they get consumed. Supporting this new billing framework provides an incredible launching pad for future innovation as Microsoft continues rolling out enhancements to the billing data itself.

Limitations related to historical billing sources

Organizations that leverage Azure public cloud infrastructure to drive their business have relied on Cloudability for many years to establish Cloud Financial Management practices successfully. From a cost allocation perspective, this has included harnessing resource group tag inheritance and the business mapping engine to reliably assign usage directly back to the business units responsible. The primary source of billing data for these organizations has historically been the Enterprise Reporting APIs. While this source has provided valuable and detailed information, it has presented certain limitations for our customers. When making upfront reservation purchases to lower hourly rates, neither the cash payment nor ongoing usage is represented with a cost amount. For delivery teams consuming these reservations, it is easy to be mistaken that this usage was free. Without an obvious way to identify true costs, it is challenging to make teams fully accountable. Recent developments at Microsoft are also impacting how organizations interact with the Enterprise Reporting APIs. As Microsoft Azure customers move from Enterprise Agreements (EA) to MCA contracts they will cease having access to this detailed billing source as the old Azure EA billing platform becomes inaccessible. Finally, it is worth noting that Microsoft is no longer updating the Enterprise Reporting APIs with enhancements and additional detail. Instead, all future updates will be made to the Cost Management Billing Export.

Adapting to next-generation cost management

The availability of the Cost Management Billing Export is a significant landmark for matters related to cloud financial management and constitutes a major shift in how Azure customers will consume billing data. The extra depth of detail, increased scope, and improvements in format mean that overall, this launch is a considerable advancement for stakeholders concerned with cost management. While the reporting benefits are certainly exciting for practitioners, Azure customers and cost management solutions that integrate this information need to adapt to this vastly different billing source and manage migration for data consistency.

Accurate chargeback, team accountability and resource-level analytics

With this launch, Cloudability makes it straightforward for Azure customers to migrate their cost reporting to the new billing framework and immediately receive the additional insights. To do this, admins grant access to the billing exports via Cloudability’s new Azure credentials UI. In a single view, costs can then be assigned to cloud usage in the ways required by all stakeholders. Including the Cost (Amortized) metric ensures the exact portion of any consumed RI is included – for delivery teams, this supports a full chargeback, and for IT finance, an accrual accounting view. By also having the Cost (Total) metric, we can identify what was actually paid for the reporting period providing a crucial cash view for invoice reconciliation. Stakeholders can do this analysis down to the resource level and explore the utilization of every RI subscription, helping to build financial confidence across all teams. The great news is that Apptio has done all the heavy lifting to ensure our customers maintain consistency in their cost reporting. Still, the more exciting aspect relates to the opportunities that lay ahead. Stay tuned as the Apptio engineering team works hard to surface additional metrics and usage details that will become available throughout Cloudability.

Figure 1: Azure dashboard focused on reservations and surfacing accurate cost measurements.

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