If you are like most businesses you struggle with the age-old problem of trying to define the perfect price for your service. You also struggle with what can and is offered as a service. While this is true for all industries, in cloud it is a particularly acute problem. It is important to remember that the cloud market has plenty of opportunity for providers to differentiate offerings or for completely new providers to enter the market and compete. However, unseating the market leaders will not come from selling commodity services. While providers like the old recurring, predictable contracted revenue model, customers are becoming more educated, have more visibility and are demanding that their bill be better aligned with their actual consumption. In addition, service differentiation does not mean simply bundling multiple features to justify a single flat price regardless of a customer’s interest. Customers are reacting to the “tyranny of packages” as they realize they are being forced into a commodity model. There is no question that the value-add bar needs to move higher and service providers need to build tailored, high-margin, sticky relationships with customers. Using financial commitments, you can achieve predictable revenue while providing customers with elasticity to utilize reserved instances, on-demand instances, bandwidth, etc.