Consumption-Based Pricing for Recurring Services

This billing model is for recurring services where the customer pays what he consumes without any commitment. Customers are charged always in arrears.

Example: Microsoft’s Azure service is billed based on what the customer consumes.

Manual Products

The product manager can create such a product using the “Recurring charge - Pay-per-use” option.

Open

• The usage records should be uploaded to our platform using an excel file before the end of the billing cycle.

• There are two types of usage resources that can be billed:

  • Quantity based or allocated resources – These resources do not reset to zero at the end of the billing cycle like the number of users using an extra service.

  • Metered resources – Resources that reset to zero at the end of the billing cycle like the data transferred or the running hours of a virtual machine.

• For quantity-based resources, you can include their cancellations also in the usage records excel file.

• Resources are billed via add-ons using the fixed-price pricing model. There should be an add-on for each billable resource.

• The consumption must be uploaded using an excel file via the usage data import tool.

Automated consumption-based services (via Service Manager implementation)

For automated consumption-based services, the service manager is responsible for collecting the usage data. There are 2 different approaches:

• Consumed quantities AND unit prices provided by the Service Manager. The charges are calculated using the resources cost or sell prices returned by the service manager and by applying the customer’s billing options.

  • Pros

    • Faster implementation since you don’t need to keep in  our platform a list of the billable resources

  • Cons

    • All resources are billed with the same pricing rules. You cannot define different margins or markup per resource

    • You cannot apply volume or tiered pricing per resource

• Only consumed quantities provided by the Service Manager. There should be an add-on per resource for pricing purposes

  • Pros

    • Flexible billing model. Resources are billed via add-ons using the fixed-price pricing model

    • You need to keep in our platform the list of the billable resources in the form of add-ons

Consumption-Based with Minimum Commitment

This billing model is for recurring services where the customer pays either a minimum commitment or the actual consumption, whichever is greater.

Example: A support plan costs 500€ / month or 60€ / hour for the support hours offered to the customer, whichever is greater.

Such products have the following options enabled

Open

The reconciliation is performed at the end of the billing period:

• The resources are billed using the consumption-based pricing model.

• If the consumption is less than the minimum commitment, an adjustment line is added in the invoice for the invoice amount to reach the minimum commitment.

• For billing of the consumption can be used any of the following two approaches:

  • Consumed quantities AND unit prices provided by the Service Manager

  • Only consumed quantities provided by the Service Manager

Fixed Price with Overage

This billing model is for recurring services where the customer is charged initially with a fixed amount. The customer’s consumption (amount) is monitored daily and if it reaches the capped threshold, overage pricing will be enforced at the end of the month.

Example: An Acronis plan allows the customer to consume any service up to 100€ / month. If the customer exceeds this limit, it will be charged extra for the overage at the end of the month.

Such products have the following options enabled

• Such products have always a calendar month as their billing cycle

• The fixed price is charged upfront

• If the consumption is more than the fixed amount, the customer will be charged for the overage at the end of the month

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