Microsoft Azure Consumption Commitment

Microsoft Azure Consumption Commitment (MACC) can be an important tool for organizations that make extensive use of Microsoft Azure. To support companies in managing and planning their cloud expenditures, the MACC model was developed. This article describes what it entails, why MACC is useful, and what considerations need to be taken into account.

What is MACC?
Microsoft Azure Consumption Commitment is a contractual agreement. Consumers enter into this commitment with Microsoft for specific expenditures on Azure over time. MACC is a tool created by Microsoft for IT managers to better control their available budget. Depending on the size of a company and the needs of the customer, a 'MACC budget' will be created.

Why Use MACC?
When entering into a MACC contract, both parties act transparently, with the company specifying the available budget. This transparency ensures that both parties are clear about what is being paid or delivered. This removes the risk factor from the negotiation. This certainty between both parties results in discounts, making it much more attractive for companies to enter into a MACC contract because it offers financial benefits.
Additionally, the high flexibility of MACC is very useful. Within the Azure Marketplace, MACC is effectively a cash equivalent. It can be spent just like normal money, for example, on subscriptions and software purchased on the Azure Marketplace. Furthermore, there are various incentives for MACC users in the form of a Service Level Discount or Azure Commitment Discount.

MACC: Disadvantages and Considerations
Since the amount of Azure usage is determined at the beginning of the contract term, it is difficult to estimate how much will be used over a longer period. This results in several disadvantages:

• If users have not utilized Azure frequently enough, it means that more has been paid than necessary. If a company's needs change, this poses a problem. There will be a weaker negotiating position for the next period because the company does not have a clear picture of what it needs. In cases of overpayment, Microsoft does offer a 12-month period to use the unused portion.
• Changes in technology may also occur that negatively impact the amount of MACC commitment made. If these new technologies reduce the need for Azure usage, companies will end up with leftover MACC budget, which again amounts to unnecessary costs.
• Since MACC agreements are legally binding, it is important for businesses to be aware of their contract terms and to understand what contract is being signed before entering into it.