Customers getting sticker shock from their monthly cloud bills is a cliche of the public cloud business. Startup Amberflo claims its metered usage billing service can stop that.
Founder and CEO Puneet Gupta told a Santa Clara IT Press Tour audience that usage-based billing was the best way to consume and pay for cloud services, so long as the metering was open, accurate and carried out by a scalable process.
“Subscription billing,” he said: “is an aberration,” as it doesn’t reflect usage. But: “Meter readings should be shared with customers, 100 percent, and customers then can’t complain about predictability.”
Amberflo provides a SaaS-based metering and billing offering. A SaaS supplier needs to define meterable events in its cloud offering; compute instance usage, storage capacity usage, IO events and so forth.
The Amberflo service detects these and collects them in its own time-series database, which uses AWS S3 as its data store. At billing time these events are priced using the supplier’s pricing method and invoices sent out.
It sounds simple and basic but the technology behind it has to be reliable so as not to lose data and function as a system of record.
If a SaaS supplier were to write the code for their own metering and billing system they have to be aware that scalability could be a real problem. This is a real-time application and can have a very high event record ingest rate. Gupta said: “AWS has its own billing service. Three years back it was running at 3 billion events per second.” Amberflo itself is processing tens of billions of meter events per day.
Gupta says that SaaS customers need to pay attention to their usage of cloud services and understand the billing metrics. He says: “Customers need to own their own metering. … Most customers have not been careful with their cloud usage.”
Being careful is key and checking bills without understanding metrics and usage is the wrong approach: “You will never get ahead of cloud cost management if you’re parsing the bill. It’s after the fact.”
Gupta says Amberflo will add more services: “Soon you will see us tackle cloud cost management the way it should be done.”
Puneet Gupta co-founded Amberflo in August 2020. He resigned from being Product Development VP for Oracle’s cloud infrastructure the year before after joining Oracle in 2015. Prior to that he spent three years at Amazon as a general manager for AWS.
His co-founder was Lior Mechlovich, Amberflo’s CTO and an ex-lead SW engineer at AWS, with 10 years at Informatica in his CV before joining AWS in 2018.
Amberflo has around 25 employees and raised $15 million in A-round funding in January this year, led by Norwest Venture Partners. This followed a January 2022 $5 million seed round led by Homebrew. Crunchbase records a $4 million pre-seed round in December 2020 as well, making a total of $24 million raised. With just 15 employees, AmberFlo is a well-funded operation.