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Common terms

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This article describes common terms and definitions used throughout the FinOps toolkit. These terms are used to help you understand the data and insights provided by the toolkit.

Amortization

Amortization breaks down reservation and savings plan purchases and allocates costs to the resources that received the benefit. Due to this, amortized costs don't show purchase costs and don't match your invoice.


CSP or Cloud Solution Provider

"Cloud Solution Provider" (CSP) is a program that allows third-party Microsoft partners to sell Microsoft Cloud products and services to their end customers. In this program, end customers receive bills directly from their partner and not Microsoft. Within the FinOps toolkit, CSP has the same level of support as Microsoft Customer Agreement (MCA) accounts unless there's a limitation in Microsoft Cost Management or the underlying commerce platform.

See also: Microsoft Partner Agreement


Commitment-based discounts

See Commitment discounts.

Commitment discounts

"Commitment discounts" refers to any discounts you can obtain by precommitting to a specific amount of usage for a predetermined amount of time, like reservations, savings plans, or committed use discounts (CUDs).

Commitment savings

"Commitment savings" refers to the total amount saved compared to negotiated and on-demand rates defined on the contract. It only includes commitment discounts. To include negotiated discounts, use Discount savings.


Discount savings

"Discount savings" refers to the total amount saved compared to list (retail or pay-as-you-go) rates. It includes negotiated and commitment discounts.


EA or Enterprise Agreement

"Enterprise Agreement" is an agreement between Microsoft and an organization for how they can purchase, use, and pay for Azure.


List cost

"List cost" is the cost of a product or service if it were billed at its list price.

List price

"List price" (also called "market price") is the publicly available price for a product or service. It's the price you would pay if you purchased the product or service without any discounts.


MCA or Microsoft Customer Agreement

"Microsoft Customer Agreement" is an agreement between Microsoft and an individual or organization. It determines how they can purchase, use, and pay for Microsoft Cloud services. Such as, Azure, Microsoft 365, Dynamics 365, Power Platform, and so on. Generally, the term "Microsoft Customer Agreement" includes Cloud Solution Provider (CSP) partners and customers.

See also: Microsoft Partner Agreement


Microsoft Online Services Agreement (MOSA)

"Microsoft Online Services Agreement" is an agreement between Microsoft and an individual or organization for how they can purchase, use, and pay for Azure. MOSA subscriptions are typically obtained directly from the Azure website.


Microsoft Partner Agreement (MPA)

"Microsoft Partner Agreement" is an agreement between Microsoft and a Cloud Solution Provider (CSP) partner organization that resells Microsoft Cloud services, like Azure, Microsoft 365, Dynamics 365, Power Platform, etc. Partners can also work with intermediary resellers. The individual or organization that resellers work with sign a Microsoft Customer Agreement (MCA).


Negotiated discounts

"Negotiated discounts" are a type of rate optimization you can obtain by negotiating with cloud providers during large deals. As an example, it usually happens with Microsoft Sales as part of signing an Enterprise Agreement (EA) or Microsoft Customer Agreement (MCA).


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