Prepaid Commit With Monthly Overage, Cloud by Cloud

A prepaid commit with monthly overage is an annual contract the buyer pays for up front, with a set amount of usage included each month and usage above it billed monthly. AWS, Microsoft and Google Cloud each bill part of that shape natively. None of them keeps a deal’s allowance monthly while the payment covers the year, so the monthly part has to be handled somewhere else.

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Acme sells usage-priced software, and its standard enterprise deal is the one Fours’ documentation uses as its example: a one-year commitment of $120K, paid up front, with $10K of usage included each month. A month under $10K costs nothing more; a month over it is billed for the difference. Globex wants to buy exactly that through its cloud marketplace.

Fours’ documentation says plainly that Google Cloud, Microsoft and AWS don’t currently support a prepaid one-year commitment combined with monthly overage metering. Cloud by cloud, that holds for the deal as Acme sells it, with the year paid up front. But each marketplace stops at a different point, and Google Cloud can carry the monthly allowance natively if Globex pays monthly instead. Choosing a pricing model in the first place is covered in cloud marketplace pricing models across AWS, Microsoft and Google Cloud; this post takes one deal shape through all three.

What is a prepaid commit with monthly overage?

A prepaid commit with monthly overage is a term contract the buyer pays for up front that includes a fixed allowance of usage each month and bills usage above that allowance as overage, month by month. It has three parts, and the marketplace has to carry all of them:

• The prepayment: $120K at the start of the year.
• The monthly allowance: $10K of usage a month. In Fours’ example, a month under $10K has no overage and no additional charge, so each month stands alone.
• The monthly overage: usage above that month’s $10K, billed for that month.

The allowance’s period is what makes the deal. Over the same quarter, a $10K monthly allowance and a $120K allowance for the year bill differently (illustrative figures):

Month	Globex’s usage	Overage, $10K monthly allowance	Overage, $120K for the year
1	$8K	$0	$0 ($112K left)
2	$13K	$3K	$0 ($99K left)
3	$14K	$4K	$0 ($85K left)
Quarter	$35K	$7K billed	$0 billed

Under the yearly version, Globex pays no overage until its usage for the year passes $120K, which may never happen. The monthly reset is the term Acme negotiated, and it’s the term the marketplace has to reproduce.

Can AWS, Microsoft and Google Cloud bill it natively?

Not with the year paid up front. All three can bill $120K up front and charge overage monthly. None of them keeps a deal’s allowance monthly while the payment covers the year, and the reason differs: AWS leaves counting usage against the contract entitlement to you, Microsoft’s included quantity follows the plan’s term, and Google’s commitment follows the installment.

What the deal needs	AWS Marketplace	Microsoft Marketplace	Google Cloud Marketplace (committed use discount)
$120K paid up front	Native: AWS Marketplace “bills your customers upfront or by the payment schedule that you define”	Native: an annual fee is “pre-paid on an annual recurrence”	Native: an annual billing frequency, whose commitment “is released at the start of the installment”
An allowance the marketplace knows about	The contract entitlement, “a specified quantity of use,” which AWS doesn’t count usage against	Each dimension’s quantity included in base, per subscription term	The commitment, which Google draws down from the usage you report
Who counts usage against the allowance	You: “you only meter for usage beyond a customer’s contract entitlements”	You: send only “the usage that is above the base fee”	Google: you report all usage “so that Google knows when the customer has reached or exceeded their commitment”
The allowance’s period, with $120K up front	Whatever your metering applies	A year: the 1-year quantity is “per each year for customers paying the recurring annual fee”	The contract: one installment, and “all remaining unused commitment expires at the end of the contract term”
Where a monthly allowance is native	Nowhere: AWS doesn’t count usage against the entitlement	A plan with a recurring monthly fee, paid monthly	Monthly installments with unused commitment set to expire, paid monthly
Overage above the allowance	Your pay-as-you-go price, billed by billing month	Billed “during each billing cycle (monthly)” once the year’s included quantity is used	At list price or discounted, by CUD option, on the month’s invoice
Prepaid commit with monthly overage, natively	No, but billable: the monthly reset is your metering’s job	No: an up-front plan’s allowance is yearly	No: one up-front installment is one allowance for the term

The row that decides the rest is who counts usage against the allowance. Where you count it, on AWS and Microsoft, the monthly reset can sit in your metering. Where Google counts it, the reset has to come from the payment schedule.

AWS: you count usage against the entitlement

AWS bills the contract and the overage, and leaves the allowance to you. The up-front part is native: “SaaS contracts allow customers to purchase your software through an upfront agreement,” and AWS Marketplace “bills your customers upfront or by the payment schedule that you define.” Each contract dimension can let customers “pay as they go for additional usage of that dimension above their contract,” and that usage is billed by billing month: AWS takes “usage records for the previous billing month” until 06:00 UTC on the first day of the next.

What AWS doesn’t do is count. “For SaaS contracts, you only meter for usage beyond a customer’s contract entitlements,” and AWS “calculates a customer’s bill using the metering data along with the prices that you provided.” Whether “beyond” means beyond this month’s $10K or beyond the year’s $120K is decided by your metering, not by AWS. So the shape is billable on AWS, as long as your metering resets the allowance every month and the contract says it does.

AWS’s metering guide shows the pattern in passing. In a vendor-metered tagging example, “the seller defines a $0.00 dimension to report credit consumption and a $0.01 dimension for overage charges,” and the buyer’s billing console lists each dimension “even if the dimension price is $0 per unit.” That’s a caption on a tagging screenshot, not a pricing method AWS documents, but it is this deal’s shape: an allowance the buyer can watch draw down, beside the overage they pay.

Microsoft: the allowance follows the plan’s term

Microsoft models an allowance, and ties it to how the plan is paid. A flat rate plan includes at least one recurring fee, monthly or annual, each “pre-paid” on its recurrence, and every metered dimension has a quantity included in base for each: per month “for customers paying the recurring monthly fee,” and “per each year for customers paying the recurring annual fee.” Microsoft spells out the annual case:

“For a yearly flat rate plan, once the quantity included in base per year is consumed, all additional usage emitted by the custom meter will be billed as overage during each billing cycle (monthly) until the end of the subscription’s year term.”

So $120K prepaid on an annual plan buys a yearly allowance, with monthly overage once it’s gone, and a monthly allowance comes only with a monthly fee. The counting is yours on either plan: “You must keep track of the usage in your code and only send usage events to Microsoft for the usage that is above the base fee.” Three constraints shape any workaround:

• Only flat rate plans meter. The metering service “doesn’t apply to the per user billing model.”
• An included quantity counts one dimension’s units, as a whole number, not dollars spread across dimensions.
• It’s public and fixed. Dimensions “communicate to the customer about how they’ll be billed,” a published plan’s included quantities “can no longer be changed,” and a dimension per month won’t scale: dimensions are shared across the offer’s plans, with “30 unique dimensions” the most a single offer can have.

Google Cloud: the allowance follows the installment

Google counts the allowance itself, and the payment schedule sets its period. Under a committed use discount (CUD), “the customer pays the commitment regardless of how much they use,” with “a set amount of time to spend the commitment, based on the payment schedule that you choose,” and you keep reporting all usage “so that Google knows when the customer has reached or exceeded their commitment.” Google’s rule for that schedule: “the commitment for each installment is released at the start of the installment, and must be used by the end of the contract.”

That turns Acme’s deal into a choice between its two halves:

• Keep the prepayment. An annual billing frequency on a one-year offer is one installment, so Globex’s whole $120K is available from day one and nothing is overage until it’s used. Whatever is left at the end expires: “for all choices, all remaining unused commitment expires at the end of the contract term.”
• Keep the monthly allowance. Monthly installments of $10K, with unused commitment set to expire at the end of each installment rather than roll over, give Globex $10K a month and bill usage above it as overage, at list price or at the discount, depending on the CUD option. Globex then pays monthly, and your cash follows: Google pays your revenue split “after collecting the payment from customers.”

How expiry, rollover and each CUD option’s overage work is in committed use discounts on Google Cloud private offers. Two rules close the obvious workarounds. A custom schedule can’t load the year into its first installment and leave the rest empty: each installment’s value, “the amount paid for an installment, divided by the number of days in the installment,” must be at least 50% of the previous one’s. And a buyer in Brazil can’t prepay the year at all: “Private offers that you create for customers with Cloud Billing accounts located in Brazil must have a monthly billing frequency.”

Google’s flat fee with usage model holds an allowance differently: “The flat fee includes a certain amount of usage,” set on the public plan as a free first usage tier. But Google lists a private offer’s customizations as “the payment amount, available product features, the discount on additional usage, and any additional discounts based on specific usage metrics.” The included amount is the plan’s, per metric and the same for every buyer on it, not a dollar allowance negotiated deal by deal.

How do you sell the shape where it isn’t native?

Put the monthly allowance where each marketplace leaves room for it: in your metering on AWS and Microsoft, since neither counts usage against the entitlement or base fee, and in the payment schedule on Google Cloud, which does. Check four things before the offer goes out:

1. The contract says the allowance is monthly, and what happens to a month’s unused balance. Only Google’s installments and expiry setting enforce either.
2. Your metering resets it monthly and reports only the excess on AWS and Microsoft. Reporting everything bills Globex again for usage it prepaid.
3. The listing agrees with the contract. Don’t publish a yearly included quantity on Microsoft that your metering won’t honor; on AWS, customers see each dimension’s name, price and description.
4. On Google, the schedule matches the promise: monthly installments set to expire for the allowance, an annual installment for the prepayment. Leave commit-aware metering off there, for the reason in the next section.

How does Fours handle a prepaid commit with monthly overage?

Fours divides the up-front commit into sub-terms and meters overage within each one. Fours’ documentation describes the gap it fills: on AWS and Microsoft, tracking usage against a prepaid commit and reporting only the excess falls to the seller. Two features cover this deal, and Fours’ usage metering documentation introduces Divide Entitlement Commit with this post’s $120K example:

• Divide Entitlement Commit splits an entitlement’s up-front (parent) commit into sub-entitlement terms of credit, so overage is metered within each term rather than across the whole commitment. Divide Commit opens a dialog where you set each sub-term’s start date, and Divide creates the sub-terms on top of the parent term, each with the type DivideCommit. Divided into twelve monthly terms, the $120K example becomes $10K of credit a month.
• Commit with additional usage metering accumulates the usage records Fours receives, compares them with the commit, and reports to the marketplace only the usage that exceeds it. You turn it on per marketplace in the Fours Console: open Usage Metering, select the Settings tab, and edit the setting under Usage Metering Configs.

One warning carries over from the documentation: Fours doesn’t recommend enabling Commit with additional usage metering on Google Cloud Marketplace, because Google’s native pricing model does the same job. That’s the CUD above, where Google counts the commitment from the usage you report.

Frequently asked questions

What is a prepaid commit with monthly overage?

An annual contract the buyer pays for up front that includes a set amount of usage each month. Usage within a month’s allowance costs nothing more; usage above it is billed as overage for that month.

Can AWS Marketplace bill a monthly allowance on an up-front contract?

Yes, but AWS doesn’t track the allowance. It bills the contract up front and whatever overage you meter, and for SaaS contracts you meter only usage beyond the customer’s entitlements. Your metering has to reset the allowance each month and report only the excess.

Does Microsoft Marketplace reset included quantity monthly on an annual plan?

No. On a yearly flat rate plan, the included quantity is per year: once it’s consumed, Microsoft bills additional usage as overage each monthly billing cycle until the year ends. A monthly included quantity comes only with a recurring monthly fee.

How do you get a monthly allowance on Google Cloud Marketplace?

Use a committed use discount with monthly installments, and set unused commitment to expire rather than roll over. Each month’s commitment is released at the start of its installment. The buyer then pays monthly; with one annual installment, the whole commitment covers the term instead.

Can a buyer in Brazil prepay a year on Google Cloud Marketplace?

No. Google requires a monthly billing frequency on private offers for customers with Cloud Billing accounts located in Brazil. Monthly installments with unused commitment set to expire still give a monthly allowance with monthly overage.

How does Fours handle a prepaid commit with monthly overage?

Divide Entitlement Commit splits an entitlement’s up-front commit into sub-entitlement terms of credit, so overage is metered within each term. Commit with additional usage metering reports only usage above the commit; Fours doesn’t recommend it on Google Cloud Marketplace, whose native pricing model does that job.

Takeaways

• A year paid up front with a monthly allowance isn’t native on AWS, Microsoft or Google Cloud: AWS leaves counting usage against the contract entitlement to you, Microsoft’s included quantity follows the plan’s term, and Google’s commitment follows the installment.
• On AWS and Microsoft you count usage against the allowance, so the monthly reset belongs in your metering, which reports only the usage above each month’s allowance.
• On Microsoft, an annual plan’s included quantity is yearly, shown to the buyer and fixed once published. Don’t publish one your metering won’t honor.
• On Google Cloud, a monthly allowance means monthly installments set to expire, and monthly payments; Cloud Billing accounts located in Brazil must be billed monthly anyway.
• In Fours, Divide Entitlement Commit splits the up-front commit into sub-terms and Commit with additional usage metering reports only the excess, except on Google Cloud, where the CUD already does that job.

Fours can divide an up-front commit into the periods your contract sets and meter the overage within each one. See how it fits your pricing in Fours’ billing and metering automation.