Demystifying Cloud Billing

Read Time: 4 minutes

Reading a cloud services bill today is a lot like reading a cell phone bill from a decade ago- before the major cellular providers wised up and simplified their financial communications. The difference is that increased cost of cloud services can have a much bigger impact on everyday business today than cell phone costs did back then, and the sticker shock from a cloud billing mistake or oversight can be far more devastating than a cell phone overage.

When the populace began shifting towards handheld phones, there was a shift in the way the world viewed telephone bills. Prior to cell phones, most people paid a flat rate for a landline phone that was shared among all the handsets in the house- and that flat rate would only change if very specific conditions were met. Maybe if the customer called an international number, or racked up too many minutes overall, an additional charge would show up on the bill. However, the charges were generally easy to understand and confirm, if not easy to swallow. When the brand new cell phone bills began to roll in, there was some confusion, perhaps even panic over the new structure. Here, a customer would pay per minute of usage, with additional fees attributed to everything from roaming charges to text messaging to internet connection- few of which were labeled in plain English.

rices provided by the major cloud vendors are per second of usage being clocked on the server side, and small charges begin to add up very quickly

 

Reorganizing Charges in the Cloud

That same shift is happening again as businesses migrate to the cloud. Just as many scratched their heads over puzzling line items in the mobile bill, companies are more than a little peeved that the promises of plummeting server costs in the cloud haven’t yet materialized. However, this is often not because of some malicious intent by the cloud provider- just as it wasn’t often malicious intent by the cell phone company. As these cutting-edge technologies grow and change, the ideas and best practices for how to charge for their services change as well. For now, cloud bills can be daunting in their own right, even if the total payout is around the estimated cost. If it’s drastically higher than what was prepared for, hunting down the problem can be a full-time job in itself.

With almost impossibly small price tags as customers begin shopping for cloud instances, it seems like it’ll be a breeze to save money; after all, paying just cents on the dollar for storage and compute, what could go wrong? Prices provided by the major cloud vendors are per second of usage being clocked on the server side, and small charges begin to add up very quickly. In addition, there are charges that aren’t directly for usage, but are about transferring data between zones, regions, or containers- something the customer might not even have explicitly realized was a charge. This is just one example of an unexpected fee a customer may not know to look for before the cloud bills start rolling in.

Perfect Transparency, Less Than Perfect Clarity

It’s true that cloud providers will be completely transparent when it comes to showing exactly what racked up charges- but not necessarily why, or in a way that’s easy to understand. Line items may not be labeled in a way that is consistent with on-premise terminology, or even consistent with other cloud providers. Services can come packaged with other services without a lot of notice, or automatically in order to function. Customers often have the experience of not remembering signing up for a particular service for this reason, and they might be correct in thinking that they don’t really need it. With a purely “a la carte” approach to pricing, there are a nearly incomprehensible number of potential combinations of services, and each configuration in the cloud can be subject to unique unforeseen charges.

Even after a charge has been identified and explained, how can a company go about fixing the issue? Some can be fixed with a corrective phone call to a cloud representative, but most will require a bit more effort. Many will necessitate a change in cloud configuration to circumvent whatever problem was identified, and it might even make more sense to switch zones, regions, or cloud providers. Alternatively, the cloud instance settings might need to be adjusted- it’s almost impossible to know without experience with the cloud provider in question.

 Prices provided by the major cloud vendors are per second of usage being clocked on the server side, and small charges begin to add up very quickly.

Cloud Billing Under a Microscope

One of the best ways to handle confusion in a cloud bill is to use a free tool to help break down the pieces into something digestible. These free tools do a good job at drawing out billing data over time into charts and graphs, making it theoretically easier to compare bills month-to-month or side by side. The drawback is that these tools can only begin to crunch the numbers- they don’t contain the insights that other solutions can provide. Comparing individual bars on a graph one by one is only slightly less tedious than comparing line items in the original bill itself.

A more comprehensive solution would be to use a managed billing service from a cloud services broker. A cloud services broker will begin with an audit of the current cloud infrastructure and will continue on to make recommendations about how best to optimize cloud usage in order to save money and correctly provision for the future. Cloud service brokers can also help save money by using their exclusive partner pricing, meaning that they can offer the same services for cheaper. Brokers also keep a close eye on volatile changes in cloud pricing, so if there is a spike from month-to-month, they will be able to correct the problem quickly and efficiently.

The DoubleHorn Promise

DoubleHorn’s solution is to not only crunch the data but give insights and comparisons that can help spot issues as they appear, not months down the road. With our brand new Customer Portal, a cloud bill is broken down into month-over-month displays with the delta calculated, and then further segmented into understandable headings for AWS customers. This will allow cloud users to assess where potentially budget-busting expenses are coming from and will allow our dedicated cloud experts to analyze places where cloud assets might be over-provisioned, under utilized, or configured incorrectly.

Even more valuable, DoubleHorn support and monitoring services allow the customer to keep a finger on the pulse of the cloud market, always listening for changes in cloud pricing that may impact their cloud instance, as well as notifying them of any major changes in cloud spend month-to-month. The cloud service brokerage will act as a go-between for the big cloud provider and the customer, meaning that there is always a person on the other end of the phone line. No endless service queues, no automated phone menus, and no hassle.

DoubleHorn's new Customer Billing Portal is just one of the ways that DoubleHorn can help


 

DoubleHorn is a cloud brokerage service that can help you manage every part of your cloud journey, from shopping and migration to cost optimization and managed billing. We provide a host of tools to empower customers with the knowledge and data they need to make educated decisions when using the cloud. Contact us today to find out more about how DoubleHorn can save you money on your cloud bill.

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