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Commitment Flexibility Appendix #535

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@cnharris10 cnharris10 commented Aug 31, 2024 •
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An appendix detailing how various commitment discount purchases and usage records with and without commitment flexibility are modeled through various examples.

@cnharris10 cnharris10 changed the base branch from working_draft to commitment-discount-appendix August 31, 2024 19:31
@cnharris10 cnharris10 force-pushed the size-flexibility-appendix branch from 133b2f9 to 6495f6b Compare August 31, 2024 19:34
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@cnharris10 cnharris10 changed the title Size flexibility appendix Commitment flexibility appendix Sep 11, 2024
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cnharris10 commented Sep 11, 2024
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specification/appendix/commitment_discounts/commitment_flexibility.md

Since providers have different rules for when size-flexibility is or is not enabled, the following, fictitious SKU pricing attributes will be used in each example below, and each example will be categorized under size-flexibility enabled or disabled sections.
When mixing usage-based commitment discounts with and without commitment flexibility with `CommitmentDiscountQuantity` measured by time, it is important to differentiate the `CommitmentDiscountUnit` for each type of commitment discount. In each scenario below, commitment discounts *without* commitment flexibility applied use "Hour" as a `CommitmentDiscountUnit`, and conversely commitment discounts *with* commitment flexibility use "Normalized Hour" as a `CommitmentDiscountUnit`.
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This paragraph was added to highlight the importance of using different units for commitment discounts with/without commitment flexibility

@cnharris10 cnharris10 changed the title Commitment flexibility appendix Commitment Flexibility appendix Sep 11, 2024
@cnharris10 cnharris10 changed the title Commitment Flexibility appendix Commitment Flexibility Appendix Sep 11, 2024
@cnharris10 cnharris10 mentioned this pull request Sep 12, 2024
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@cnharris10 editorial question. Should this go under the example heading in the appendix?

jpradocueva pushed a commit that referenced this pull request Sep 12, 2024
@cnharris10 @ijurica
@udam-f2 @thecloudman @ljadvey @flanakin
FOCUS #319: Track (sometimes differing) commitment burndown units sep…
285dabe 
…arately from consumed quantity/unit columns (#400)

**Lead Maintainers**: Chris Harris, @cnharris10, Irena Jurica, @ijurica
### Documents: 
* **PR**:
[#400](#400)
Commitment Utilization and Normalization
* **PR**:
[#524](#524)
rename Commitment-Based Discount to Commitment-Discount by
[[email protected]](mailto:[email protected])
* [Usage vs Pricing Quantity and unit
examples](https://docs.google.com/spreadsheets/d/1zA0brhrEntfWlzt5VNcNLBFnKPEiarajTF84o4ATeEw/edit?gid=1705742856#gid=1705742856)
*
[24.07.21-CommitmentUtilization-sample-datasets](https://docs.google.com/spreadsheets/d/1AYDPZ4rl90PPEbyQJUaGCUSwZ4s_sfy-8sO2KyNq0aM/edit?usp=drive_link)
*
[#400-commitment-utilization](https://drive.google.com/drive/u/0/folders/1u4_rc6TAqgMwuIQEKUVIX3zAzyvLM7Dj)
folder
* Document: [24.09.08 - Commitment utilization
discussion](https://docs.google.com/document/d/1bOD6MYoFi0fX-MgLyN-hxUpNOSfojlsL0MSt3menOxk/edit?usp=sharing)
* **Slack channel**:
[#tf-commitment-utilization](https://f2-focus.slack.com/archives/C07CPAQDN75)
* Approval deadline: ~Aug 29~, Sep 5


# Related PR's (Appendices):
- #528
- #535

# Key Points
- Adds 3 new columns to track CSP usage-based and spend-based
commitments: `CommitmentDiscountConsumedQuantity`,
`CommitmentDiscountPurchasedQuantity`, `CommitmentDiscountUnit`
- `CommitmentDiscountConsumedQuantity` captures the commitment units
used or unused in a charge period.
- `CommitmentDiscountPurchasedQuantity` captures the commitment units
purchased for one-time and recurring charge periods.
- `CommitmentDiscountUnit` captures the unit that the commitment
discount specifies.
- Fixes a 1.0 bug by specifying that `ConsumedQuantity` and
`ConsumedUnit` MUST be NULL for unused commitment rows. (reference
[pr](#507))
- Further scopes the definition of `commitment discount` and `negotiated
discount` within the glossary and specifies that `CommitmentDiscount*`
columns only correspond to `commitment discounts`.

## UPDATE (8/16/24)
1. Columns renamed to: `CommitmentDiscountConsumedQuantity`,
`CommitmentDiscountUnit`, `CommitmentDiscountPurchaseQuantity`
2. `{List,Contracted}UnitPrice`, `Pricing{Quantity,Unit}` are null when
`CommitmentDiscountStatus:Unused`
3. `{List,Contracted}Cost` are 0 when `CommitmentDiscountStatus:Unused`
4. New, official glossary terms incorporated from FinOps page for
[`commitment-based
discount`](https://www.finops.org/assets/terminology/#commitment-discounts)
and [`negotiated
discount`](https://www.finops.org/assets/terminology/#cloud-cost-management-terminology)

## UPDATE (8/19/24)
1. `{List,Contracted}{Cost,UnitPrice}` and `Pricing{Quantity,Unit}`
columns now `0` or `null` when `CommitmentDiscountStatus:Unused` (TO BE
DISCUSSED in TF-1)
2. `{List,Contracted}{Cost,UnitPrice}` and `Pricing{Quantity,Unit}`
columns now in bullet-list format.
3. Correction-based normative text added by Irena.
4. This
[pr](#524)
exists to renaming all instances of
`/commitment[\-,\s]?based\sdiscount/i` to `commitment discount` (with
correct casing)

### Discussion Points (8/20/24)
1. 2 current views for columns: `{List,Contracted}{Cost,UnitPrice}` and
`Pricing{Quantity,Unit}` when `CommitmentDiscountStatus:Unused`
    a. Set all values to appropriate `null` or `0` values (current).
b. Set all values to the same values as the purchase record (if it
exists).
2. Currently, `PricingCategory MUST be "Committed" when
[CommitmentDiscountId](#commitmentdiscountid) is not null`. Should this
be changed to `Standard` for `Purchase` rows where the
`CommitmentDiscountId` is the `ResourceId`?
3. With commitment/negotiated discount definitions altered, is it clear
that current/planned `CommitmentDiscount*` columns are relevant for
commitment discounts and *not* negotiated discounts?

## UPDATE (8/21/24)
1. Includes a recurring purchase for each charge period of the term for
No/Partial Upfront commitments
- No Upfront Purchase - has all units for the charge period
- Partial Upfront Purchase - has 1/2 of the units for each charge period
2. Reverts changing guidance around these
`{List,Contracted}{Cost,UnitPrice}` and `Pricing{Quantity,Unit}`
columns.
3. Adds additional guidance commitment discount purchase is one-time vs.
recurring
4. Adds additional phrasing to differentiate commitment vs negotiated
discounts in each CommitmentDiscount* column.
5. Removes edit to resource name to further minimize pr size (for now)

## Update (8/22/24)
1. Changes to the ResourceId column have been reverted (no clause for
ResourceId to be null with an unused commitment discount)

## Update (8/31/24)
Given that this pr was not fully approved on 8/30, and there was
considerable feedback (but less time) to merge
`CommitmentDiscountConsumedQuantity` and
`CommitmentDiscountPurchasedQuantity` into 1 column, I've gone ahead
with this change to form column: `CommitmentDiscountQuantity`.

Practitioners can stil filter to purchases and committed usage like:
- Purchases: `ChargeCategory = 'Purchase' AND CommitmentDiscountId IS
NOT NULL`
- Committed Usage (Used): `ChargeCategory = 'Usage' AND
CommitmentDiscountStatus = 'Used' AND CommitmentDiscountId IS NOT NULL`
- Committed Usage (Unused): `ChargeCategory = 'Usage' AND
CommitmentDiscountStatus = 'Unused' AND CommitmentDiscountId IS NOT
NULL`.

## Update (9/3/24)
- Added a brief paragraph around size-flexibility within
`CommitmentDiscountQuantity`
- Added additional glossary terms: `size-flexibility`,
`instance-family`, `instance-type`, `instance-type-ratio`.
- `instance-type-ratio` is the proposal for a generic, "FOCUS" term for
`normalization factor` (AWS), or `size flexibility ratio` (Azure)

This change is meant to reduce the number of proposed columns *without*
changing *any* (meaningful) intent of the previous versions with 2
quantity columns. The last commit to this pr encapsulates this entire
change and can be backed out if the group does not approve of this
iteration.

## Update (9/10/24)
- Further generalize "size-flexibility" as "commitment flexibility" and
tie to provider requirements
- Further generalize unit suggestions

# Sample Data

https://docs.google.com/spreadsheets/d/1AYDPZ4rl90PPEbyQJUaGCUSwZ4s_sfy-8sO2KyNq0aM/edit?pli=1&gid=1976106562#gid=1976106562

# Normative Text (original version, adopted into pr)


https://docs.google.com/spreadsheets/d/1AYDPZ4rl90PPEbyQJUaGCUSwZ4s_sfy-8sO2KyNq0aM/edit?pli=1&gid=464941124#gid=464941124

---------

Co-authored-by: Irena Jurica <[email protected]>
Co-authored-by: Udam Dewaraja <[email protected]>
Co-authored-by: Graham <[email protected]>
Co-authored-by: Larry Advey <[email protected]>
Co-authored-by: Michael Flanakin <[email protected]>
Base automatically changed from commitment-discount-appendix to working_draft September 20, 2024 17:28
@shawnalpay shawnalpay added the needs backlog review Items to review with members and confirm whether to close or carry forward label Oct 30, 2024
@shawnalpay shawnalpay added the needs work item Needs an issue that adheres to the Work Item issue template, prior to consideration by stakeholders label Oct 30, 2024
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jpradocueva commented Nov 2, 2024 •
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Comments from Members' call on Oct 31:

Analysis:
This appendix would document options for commitment size flexibility, allowing FOCUS users to better manage commitment terms and sizes. The appendix will include information on handling various commitment structures, which is particularly useful for organizations needing to adapt commitments based on usage patterns and flexibility requirements.
Agreements:
Finalize the appendix as an official part of the FOCUS documentation to provide structured options for commitment size flexibility in line with PR #535.
Retain #535 for v1.2 and finalize through a backfilled work item. Chris will create the work item.

@shawnalpay shawnalpay linked an issue Nov 7, 2024 that may be closed by this pull request
[Work_Item] Add Commitment Flexibility examples within the Appendix #634
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@shawnalpay shawnalpay added 1.2 consideration To be considered for release 1.2 and removed needs backlog review Items to review with members and confirm whether to close or carry forward labels Nov 7, 2024
@shawnalpay shawnalpay added this to the v1.2 milestone Nov 25, 2024
@shawnalpay shawnalpay added 1.2 Agreed scope for release 1.2 and removed 1.2 consideration To be considered for release 1.2 labels Nov 27, 2024
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[Work_Item] Add Commitment Flexibility examples within the Appendix
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