The Enterprise Cloud

Chapter 5. Billing and Procurement

Key topics in this chapter:

• Capital versus operational expenses

• Concerns with the “build it and they will come” model

• Ordering cloud services, procurement challenges in an automated service catalog

• Fixed price XaaS versus variable scaling and pricing

• Metering versus allocated pricing models

• Cloud billing versus accounting and invoicing systems

• Usage forecasting

• Legal and contract agreements

• Top cloud providers

• Billing and procurement best practices

Cloud services represent not only a new style of delivering IT services, but also a change in the way they are procured, resource usage is measured, billing is carried out, and the way organizations maintain budgets. In this chapter, I focus on lessons learned and best practices relating to the resource tracking, billing, contract terms, and public cloud vendor guidance. This chapter covers topics relating to both a private enterprise cloud and also procuring public cloud services as many organizations consider or end up with a combination of both cloud models.

Because some large organizations serve as a central IT for other departments or peer agencies, this would put central IT into a cloud service brokering role—making these other departments or agencies essentially “customers,” which is a term that will sometimes be used in this chapter. You can read a full description of cloud brokering in Chapter 8.

Capital Versus Operational Expenses

We begin this chapter with a brief ...