From bd4e9f535d3637780f04e830509f5b03da50c398 Mon Sep 17 00:00:00 2001 From: rileyjenk Date: Sun, 10 Sep 2023 11:52:06 -0600 Subject: [PATCH] Renaming Amortized Cost metric to Effective Cost (#144) Renaming Amortized Cost to Effective Cost due to excessive feedback on the name. --- .../{amortizedcost.md => effectivecost.md} | 10 ++++----- specification/metrics/metrics.mdpp | 2 +- .../{amortizedcost.md => effectivecost.md} | 22 +++++++++---------- 3 files changed, 17 insertions(+), 17 deletions(-) rename specification/metrics/{amortizedcost.md => effectivecost.md} (67%) rename supporting_content/metrics/{amortizedcost.md => effectivecost.md} (86%) diff --git a/specification/metrics/amortizedcost.md b/specification/metrics/effectivecost.md similarity index 67% rename from specification/metrics/amortizedcost.md rename to specification/metrics/effectivecost.md index b206007ca..6335140ee 100644 --- a/specification/metrics/amortizedcost.md +++ b/specification/metrics/effectivecost.md @@ -1,21 +1,21 @@ -# Amortized Cost +# Effective Cost -Amortized cost represents the sum of the amortized upfront fees, amortized recurring fees, and the usage cost of the line item. This column is often used to show spending trends that include on demand rates, effective commitment-based discount rates, recurring commitments, as well as amortization of upfront fees. The fee and upfront amortization portion of this column's value should be proportional to the number of units for the line item and the time granularity of the data. The currency for the value specified in Amortized Cost can be found in the [Billing Currency](#billingcurrency) column. The aggregated Amortized Cost for a billing period may not match the charge received on the invoice for the same billing period. +Effective cost represents the sum of the amortized upfront fees, amortized recurring fees, and the usage cost, including discounts, of the line item. This column is often used to show spending trends that include on demand rates, effective commitment-based discount rates, recurring commitments, as well as amortization of upfront fees. The fee and upfront amortization portion of this column's value should be proportional to the number of units for the line item and the time granularity of the data. The currency for the value specified in Effective Cost can be found in the [Billing Currency](#billingcurrency) column. The aggregated Effective Cost for a billing period may not match the charge received on the invoice for the same billing period. Practitioners are faced with two main challenges with respect to this metric: 1. Practitioners need to amortize upfront fees over the duration of the commitment and distribute those fees to the appropriate reporting groups (e.g. tags, resources). 2. Many commitment based discount constructs include a recurring expense for the commitment for every billing period and must distribute this cost to the resources using the commitment. This forces reconciliation between the initial commitment line item per period and the actual usage line items. -The AmortizedCost column MUST be present in the billing data. This column MUST be a numeric value of type Decimal and MUST NOT contain null values. +The EffectiveCost column MUST be present in the billing data. This column MUST be a numeric value of type Decimal and MUST NOT contain null values. ## Column ID -AmortizedCost +EffectiveCost ## Display name -Amortized Cost +Effective Cost ## Description diff --git a/specification/metrics/metrics.mdpp b/specification/metrics/metrics.mdpp index fc113cc0e..ae918b96d 100644 --- a/specification/metrics/metrics.mdpp +++ b/specification/metrics/metrics.mdpp @@ -5,5 +5,5 @@ The FOCUS specification defines a group of columns that provide numeric values. allow for aggregation operations such as arithmetic operations (sum, multiplication, averaging etc.) and statistical operations. When combined with dimensions (which are qualitative value columns), metrics reveal details in your data. -!INCLUDE "amortizedcost.md",1 +!INCLUDE "effectivecost.md",1 !INCLUDE "billedcost.md",1 diff --git a/supporting_content/metrics/amortizedcost.md b/supporting_content/metrics/effectivecost.md similarity index 86% rename from supporting_content/metrics/amortizedcost.md rename to supporting_content/metrics/effectivecost.md index c2460414a..c433c2747 100644 --- a/supporting_content/metrics/amortizedcost.md +++ b/supporting_content/metrics/effectivecost.md @@ -1,6 +1,6 @@ ## Supporting content -### Column: Amortized Cost +### Column: Effective Cost #### Example Scenarios @@ -11,25 +11,25 @@ ##### On the day of purchase a line item exist for the upfront cost of the reservation as follows: -| Charge period | Billing period | Charge Type | Units | Billed Cost | Amortized Cost | +| Charge period | Billing period | Charge Type | Units | Billed Cost | Effective Cost | | ----------------------- | ------------------------ | ----------- | ----- | ----------- | -------------- | | Jan 1 2023 - Jan 1 2024 | Jan 1 2023 - Jan 31 2023 | Purchase | 3 | 26.69589041 | 0 | -###### Note +###### Note *Billed cost is showing the total cash outlay for the reservation. Also note there is no initial Reserved Instance fee representing the cost of the RI for the applicable period.* ##### Also on each hour a line item is added as follows -| Charge period | Billing period | Charge Type | Units | Billed Cost | Amortized Cost | +| Charge period | Billing period | Charge Type | Units | Billed Cost | Effective Cost | | ----------------------- | ------------------------ | ----------- | ----- | ----------- | -------------- | | Jan 1 2023 - Jan 2 2023 | Jan 1 2023 - Jan 31 2023 | Usage | 3 | 0 | 3.81369863 | -###### Note: +###### Note: *The amortization is equal to the (Upfront fee / (number of normalized units reserved x periods) x normalized line item units consumed).* ___ @@ -37,30 +37,30 @@ ___ ##### If the Reserved Instance is unused during a period, for example another ineligible instance type is used: -| Charge period | Billing period | Charge Type | Units | Billed Cost | Amortized Cost | +| Charge period | Billing period | Charge Type | Units | Billed Cost | Effective Cost | | ----------------------- | ------------------------ | --------------- | ----- | ----------- | -------------- | | Jan 4 2023 - Jan 5 2023 | Jan 1 2023 - Jan 31 2023 | OD Usag | 3 | 5.544 | 5.544 | | Jan 4 2023 - Jan 5 2023 | Jan 1 2023 - Jan 31 2023 | Unused RI Usage | 3 | 0 | 3.81369863 | -###### Note: -*For the On Demand usage the Billed cost and Amortized cost are the same with an Amortization of Zero. Since the RI went completely unused during the period there is an unused RI usage line item with the an amortization equal to (Upfront fee / (number of normalized units reserved x periods) x normalized line item units. Amortized Cost is equivalent to Amortized since this is a full upfront reservation* +###### Note: +*For the On Demand usage the Billed cost and Effective cost are the same with an Amortization of Zero. Since the RI went completely unused during the period there is an unused RI usage line item with the an amortization equal to (Upfront fee / (number of normalized units reserved x periods) x normalized line item units. --- ##### If the RI is partially unused during a period, for example a scale down occurs: -| Charge period | Billing period | Charge Type | Units | Billed Cost | Amortized Cost | +| Charge period | Billing period | Charge Type | Units | Billed Cost | Effective Cost | | ----------------------- | ------------------------ | --------------- | ----- | ----------- | -------------- | | Jan 4 2023 - Jan 5 2023 | Jan 1 2023 - Jan 31 2023 | OD Usag | 3 | 5.544 | 5.544 | | Jan 4 2023 - Jan 5 2023 | Jan 1 2023 - Jan 31 2023 | Unused RI Usage | 3 | 0 | 3.81369863 | -###### Note: -*For the Reserved Instance Usage the Billed cost is zero as this RI is full upfront. It is especially important to note that the usage units must be normalized for this formula to be applicable in cases of size flexibility (e.g. c7g.large normalized units is 4, c7g.medium is 2). Amortized cost is the same as amortization because the upfront fee covers all of the compute usage expense for this line item.* +###### Note: +*For the Reserved Instance Usage the Billed cost is zero as this RI is full upfront. It is especially important to note that the usage units must be normalized for this formula to be applicable in cases of size flexibility (e.g. c7g.large normalized units is 4, c7g.medium is 2). Effective cost is the same as amortization because the upfront fee covers all of the compute usage expense for this line item.*