All and Azure Support Plans are available through a Direct Enterprise Agreement. The EA also gives you access to the Azure Marketplace, an online shop for all Azure products and services. If you purchase Azure through a direct EA, you are required to make an upfront Monetary Commitment for each of the three years of the agreement, with a minimum order value of one “Monetary Commitment SKU” of $100 per month ($1,200/year).
A Monetary Commitment is paid up front, and as the Azure Service is used the corresponding charge is taken-off from the Monetary Commitment throughout the year. Monetary Commitments can be used to pay for any of the consumption-based services, but not the Azure Services licensed under User Subscription Licenses (SLs), like for example the Azure Active Directory Services.
If Azure is purchased via a direct EA (directly from Microsoft not through a reseller), a Consumption Allowance is offered. The Consumption Allowance is a threshold of 50% of the Monetary Commitment on top of the initial Monetary Commitment. This threshold is built in to allow customers to exceed their initial commitment.
If your annual usage is less than the Annual Commitment ($100,000) + Consumption Allowance ($50,000), all overage (the amount over $100,000) will be billed on the anniversary date.
If your annual usage is greater than the Annual Commitment + Consumption (e.g. greater than $150,000) then all usage exceeding the annual commitment ($100,000) will be billed each quarter.
Example: If a customer makes a commitment for $100K, the Consumption Allowance will be $50K (50% of the Monetary Commitment). If the customer then exceeds his $100K with $40K, which is less than his Consumption Allowance ($50K), then the customer will be billed for the $40K at the end of the year.
To support its customers, Microsoft sends notification of usage at the 50%, 75%, 90% and 100% of the sum of the Monetary Commitment and the Consumption Allowance.
In our example, the end user would receive usage notification from Microsoft when he will reach the following consumptions:
- 50% * ($100k+$50K) = $75K consumption
- 75% * ($100K+$50K) = $112.5K consumption
- 90% * ($100K+$50K) = $135K consumption
- 100% * ($100K+$50K) = $150K consumption
Once an Azure Services Monetary Commitments is made, you receive a single activation key which must be activated within five years of the purchase date. After the key is activated, a unique 12-month consumption period starts during which all Monetary Commitment must be used.
The downside of this way of purchasing Azure Services is that the unused amounts cannot be rolled over into future periods and any remaining balance at the end of the year will be lost. Moreover, you are billed for the same Monetary Commitment for the following years, unless you ask for a reduction.
Going back to the previous example: let’s say the customer made a monetary commitment of $100K per year. The customer then consumes only $50K in the first year. He will not be refunded for the remaining $50K and unless he asks Microsoft to adjust his monetary commitment for the next years, he will be billed for the initial commitment of $100K.