Commitment Utilization

I. Formal Definition

The proportion of a financial commitment instrument, such as a reserved instance or savings plan, that is consumed by qualifying usage during the commitment period. Utilisation below the federation floor of seventy percent indicates either over-commitment, workload migration without portfolio rebalancing, or misaligned instrument selection. Utilisation persistently above ninety-five percent indicates under-commitment and a probable opportunity for additional discount capture. The federation requires that utilisation be reported with both numerator and denominator disclosed, not as a single ratio.

II. Etymology

Composite term emerging from cloud-finance literature in the late 2010s; combines the commercial term commitment with the accounting term utilisation.

III. Federation Usage

Federation members publishing commitment utilisation must include the commitment notional, the qualifying usage volume, and the unused capacity. Reporting the ratio alone is non-conforming under MEV-Annex:3.2.

IV. Related Terms

• reserved-instance
• savings-plan
• rightsizing
• budget-variance

V. Authoritative Citations

• UFMS-001:2.4UFMS Article II - Utilisation Floor
• MEV-Annex:3.2MEV Annex III - Utilisation Disclosure

VI. Citation in BibTeX

@misc{ifo4_glossary_commitment_utilization,
  title        = {{Commitment Utilization}},
  author       = {{IFO4 Federation Editorial Board}},
  howpublished = {{IFO4 Federation Glossary, slug \texttt{commitment-utilization}}},
  year         = {2026},
  url          = {https://ifo4.org/glossary/commitment-utilization},
  note         = {Category: FinOps; key: CommitmentUtilization}
}

VII. Challenge This Definition

Federation members and accredited practitioners may challenge any entry under TGS-002:1.7. Filed challenges are routed to the editorial board, triaged into the revision register, and resolved in writing on the public docket. The slug remains stable through any revision.