A growing trend in cloud computing is to set prices based on actual utilization of resources such as memory, storage, processing, and bandwidth. This is a rational way to price cloud infrastructure, because these are the items that contribute to the cost of cloud hosting, especially as the scale of a solution increases. One of the benefits of moving to the cloud is to not have to worry whether you have enough computing resources, because it is so easy to add more resources in a cloud environment. In some ways, this is a throwback to timesharing, the venerable practice of buying time on an expensive mainframe when it was inconceivable that everyone would own their own computer. The downside of usage-based pricing is that the actual bill is hard to predict. Without knowing the cost in advance, budgeting is challenging. How can a customer plan for this expense? Another risk is that utilization of resources may be beyond your control. You could have a surge of real or fake use
From the vice president of the InfoStrat division of Serenic Software, thoughts on digital transformation, marketing automation, customer relationship management, Microsoft Dynamics 365 (formerly CRM), government contracting, customer service and more. For breaking news, follow me on Twitter @jamestownsend and for more depth see the InfoStrat website at www.infostrat.com