Provider-Managed Azure Subscriptions: Cost Control and Commitment Clarity

Premise: Partnering with a service provider (SP) to manage Azure subscriptions can bring both clarity and complexity in cost management for organizations under Enterprise Agreements (EA) or Microsoft Customer Agreements (MCA-E). As a Microsoft Cloud Solution Architect assisting enterprise clients, I find this scenario fascinating and ripe with powerful, often misunderstood dynamics that can significantly impact cost control and commitment management. This article delves into these aspects with a view to unraveling the nuances involved.

Understanding the Scenario

When an organization signs a contract with a service provider, they effectively outsource the management of certain cloud resources while staying in control of pricing. The aim is to let resource usage contribute towards their Microsoft Azure Consumption Commitment (MACC). This involves associating Azure subscriptions with a Microsoft Entra ID tenant managed by the service provider. For visualization, let’s consider a scenario with “Subscription B.”

Here, the service provider gains full Role-Based Access Control (RBAC) to Subscription B’s resources, but the billing connection remains rooted in the customer’s EA or MCA-E profile. This necessitates a well-calibrated alignment of responsibilities and cost insight between the customer and their service provider.

From the Customer’s Lens

Cost & Pricing

The financial commitment captured in Subscription B is meticulously aligned with the customer’s billing account or MCA-E profile. The computational and marketplace service costs tie directly to the pre-negotiated customer price list. Notably, the Azure resource usage and any eligible Marketplace consumption in Subscription B feed into the MACC commitments.

Customers benefit from comprehensive cost visibility through Azure Cost Analysis, empowering them to dissect costs down to the granular billing account or profile level, ensuring peak cost allocation transparency.

Commitments (Reservations / Savings Plans)

Subscription B’s configuration allows shared commitments at the overarching billing account or profile level, aiding in matching resource allocation. However, customers interested in commitments exclusive to Subscription B must ensure RBAC rights and adherence to global billing policies are in place. This demonstrates the latitude customers have in driving bespoke resource management strategies while maintaining cost oversight.

From the Service Provider’s Perspective

Cost & Pricing

Service providers like the curator of Subscription B assume the mantle of resource and cost management. Their purview of actual and amortized costs is largely limited to subscription-level access, lacking direct intercept on the customer’s price sheets or granular invoice details.

Commitments (Reservations / Savings Plans)

While providers can possibly purchase commitments scoped at Subscription B or finer resource granularity, the onus of cost fallbacks on the customer’s billing infrastructure. Notably, provider-side commitments from their billing accounts remain extricated from Subscription B’s cost equation, showcasing a decoupled management approach.

Key Takeaways

Mastering the ballet of customer and provider managed Azure subscriptions demands proficiency and strategic clarity:

• Decoupled Ownership: Organizations have the luxury of detaching subscription administration from billing authority, enabling adaptable operational dimensions.
• Cost Control: Full transparency remains with the customer, where pricing, cost allocation, and commitment optimization are seamlessly intact despite external subscription management.
• Governance and Policy Alignment: Critical to the configuration’s success is the precision in billing policies and RBAC settings that harmonize responsibilities between stakeholders.

Provider-managed Azure subscriptions present a robust framework for enterprises looking to streamline operations while keeping a robust hold on financial commitments and management. By fostering coherent policies and adopting best practices in configuration, organizations can maneuver the complex interplay between customer control and provider flexibility, engendering a mutually profitable partnership.

For a deeper strategic integration and successful financial stewardship, continuous dialogue between the customers and their service providers remains pivotal.

Read more on Microsoft Cost Management: Billing & Trust Relationships Explained