Direct vs indirect cloud billing, what’s all the fuss?

When considering the cost of cloud, most of us think the solution to controlling spend is all about the practice of FinOps. This focuses on optimising what you’re using in cloud by helping to adapt how your teams maintain cloud use with the tools available. While this is a key measure to control cloud cost, another sometimes far simpler way of minimising spend is being efficient with how you buy cloud.

There are many options when buying cloud, and it’s essential that you consider your unique business requirements – this includes looking at the benefits of where you buy your cloud – directly or through a partner.

In March 2023, Ofcom published the results of its Cloud Services Market Research. Of the organisations surveyed, only one-third still buy cloud directly. By my maths, that leaves two-thirds who have identified a benefit from buying indirectly via a partner. The benefit of buying via a partner is also attributed in this same report to advice, support and better understanding.

For anyone in that one-third who is considering moving their billing to a partner, or indeed anyone evaluating if they have the right partner in place for existing billing, we’ve created this blog post to summarise common questions and compare some of the key purchasing differences between two of the biggest cloud providers, AWS and Microsoft Azure.

Commercials

Can you get the same discounts or pricing directly or indirectly (via a partner) between Clouds?

No. Right off the bat, each cloud provider has different list pricing, all publicly available, for all their services in each of their regions. Every provider then has a variety of agreements from pay-as-you-go, to term-based commitments that vary what you pay. These can be applied directly or indirectly via a partner.

Each provider then offers different partner-billed models. While the models are consistent across the partners, all partners are not equal, with each having a range of benefits to support customers. A good example of this is with Microsoft – if you currently bill directly or have a legacy agreement, moving this to partner billing, known as a CSP (Cloud Service Provider), isn’t straightforward for all partners. Microsoft’s top tier of partners, known as Azure Expert MSP, have access to tooling and processes to make this a seamless (not always though) billing transfer. Partners without access to such items would require you to migrate and/or rebuild the Azure resources in-house. This can be incredibly time-consuming (similar to a cloud migration) and/or involve downtime.

If I buy from a partner, who is responsible for cost management?

If you are simply buying cloud through a partner, then you are still responsible for cost management, tracking, waste and reporting. Some partners may bundle in or offer bolt-on services to help you with these things though.

I have large amounts of dev/test, how is this priced?

It works slightly differently between providers. 

Firstly, each provider has certain configurations that are ‘recommended’ for non-production workloads. They are often cheaper but less performant as a trade-off.

From there AWS may offer credits for such workloads which can be applied to your account, either by your billing partner or directly.

Microsoft has specific dev/test pricing tiers which are not accessible to partners and typically these subscriptions are directly billed by Microsoft.

How are Savings Plans and Reserved Instance purchases managed?

This is broadly the same between cloud providers and through direct vs indirect/partner billed. Each cloud provider has a range of options available with the freedom for self-serve purchasing, whether that be when being billed directly or via a partner.

Architecture and security

Would we have full control and ownership of our assets?

Yes, but with some nuances for each cloud provider. 

If buying AWS via a partner, then typically the partner does not require any administrative access to your AWS environment or data etc. This can change if you choose to move your AWS support to a partner. For billing, the partner typically requires read-only IAM (identity and access management) roles in your account, however this would not grant access to your environment or data.

With Microsoft, and billing via a partner, the partner typically requires Foreign Principal access to the subscriptions to be billed. Softcat will have DAP (delegated administration privileges) over your tenant by default, which can be changed by you to GDAP (granular delegated administration privileges) for some partners, including Softcat, that allow this.

Is there any change to my architecture or deployed cloud services?

No change in any scenario.

Operations

If I buy from a partner, does that partner provide operational cloud support/break-fix?

It depends! 

If you buy Microsoft Azure through a partner, then in most scenarios the partner is mandated to provide you the support (reactive not proactive). 

This is different to AWS (and Google Cloud) where the support is decoupled from the purchasing.  Support can either be direct while purchasing indirectly, or some partners also provide you with the support alongside the purchasing. You can also split the purchasing and support between partners.

Is partner support proactive?

Typically not by default, and most commonly it’s reactive support, i.e., the cloud breaks and you notify the partner, not the other way around.

But many partners have proactive/managed services that flip this.

I have other partners designing/building/maintaining my cloud systems. Is this impacted?

No, your cloud (AWS or Azure) operating models will not change.

I have Cloud Provider aligned resources, such as architects and/or technical account managers.  Will this change?

In most cases, the provider-aligned team will stay aligned, but this is typically answered through a mutual conversation between all parties.

Summary

Looking back to the Ofcom article mentioned earlier, there is a clear trend of organisations buying cloud indirectly via partners. The main benefits are linked to cost and centralised support. While many of the partner programmes are the same, preset by the cloud providers, not all partners have the same experience to apply these to the unique needs of the organisations they work with.

Find out more about Cloud billing and the Cloud Marketplace in our other blogs.

Please contact your Softcat Account Manager if you’d like to find out more, including how Softcat can help.