How to bill subscriptions with contract commitment

Many digital services now follow a subscription model, but not all subscriptions are equal. One common approach, especially in B2B software and cloud services, is the contract commitment model — where customers agree to use and pay for a service for a fixed term in exchange for better pricing.
This model is widely used by many vendors, including Microsoft and Google. In ActivePlatform, it’s fully supported and highly configurable for both resellers and customers.

A commitment-based subscription is one where:

• The customer agrees to continue the subscription for a full term, typically 12 or 36 months.
• In return, the customer receives more favorable pricing compared to a flexible monthly subscription.
• Early termination or reduction in resource quantity (like licenses) is restricted.

This model benefits both sides: resellers get predictable revenue, and customers get better prices.

To make this model work smoothly, ActivePlatform includes several features and safeguards:

1. Clear visibility of commitment terms

Commitment details are shown to the customer at every key step:

• In the product catalog
• During order placement
• On the subscription details page
• In email notifications

This helps avoid misunderstandings and improves customer trust.

2. Optional cancellation window

Understanding that early termination still can be allowed, ActivePlatform gives resellers the option to configure a short period after purchase — precisely measured in hours — during which the customer can cancel:

• If canceled within the first day, no charges are applied.
• If canceled later (but still within the period), a prorated charge is applied based on actual usage.

This adds flexibility without breaking the spirit of the commitment model.

3. Fixed license quantity — with the option to grow

During the commitment period:

• The number of licenses (or other resources) cannot be reduced.
• However, increases are always allowed.

Closer to the renewal date, customers can prepare a renewal order with a new license quantity — more or less — that will take effect when the current term ends.
This allows customers to scale up during the term and scale down later — while keeping contractual integrity intact.

4. Handling unpaid subscriptions

If a customer fails to pay, the platform doesn’t immediately terminate the subscription. Here’s how it works:

• The reseller can manually suspend the subscription on the vendor side to cut off access and force the customer to pay.
• Billing continues on the platform side to minimize financial risk — if the subscription follows a recurring monthly payment model.

That’s because the customer remains under contract — so the platform generates invoices until the subscription is terminated at the end of the term.
This approach helps resellers recover costs while keeping operational control.

Billing subscriptions with commitments requires a thoughtful balance of automation, clarity, and business safeguards. ActivePlatform delivers exactly that — helping resellers support modern subscription terms with minimal manual work and a seamless customer experience.

ActivePlatform is a full-service automated cloud brokering solution for cloud service providers and internal IT hubs that makes it easier to manage and control the cloud delivery and profitability. ActivePlatform unites vendors, providers, developers, and resellers into a single ecosystem for buying, selling, and managing cloud services. With its open vendor integration framework, ActivePlatform creates a vibrant catalog of cloud services ultimately helping businesses gain access to the services they need to thrive.

ActivePlatform enables SaaS, PaaS, IaaS aggregation, delivery, and monetization, provides simplified administration through central management, and enables critical visibility into resellers and cloud services consumption and usage. The platform has implementations with distributors, cloud solution providers, and telecom operators. ActivePlatform is headquartered in Europe.