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Cloud pricing: It's (really) complicated

Brandon Butler | Dec. 10, 2013
Pricing in the cloud computing market is extremely complex and not user friendly, a new report finds.

To provide a clue into the complexity of cloud pricing, here are just some of the ways 451 found that cloud providers priced their services:

  • On-demand pricing: Customers are billed for consumption of virtual machines using a fixed unit price
  • Reserved instances: Customers are billed a flat fee in advance for a service and receive a discounted rate for consumption
  • Spot pricing: The price of a resource varies with time, and customers must bid to gain access to these resources
  • Prepaid VM access: Customers pay a single fixed fee to access a specifically sized instance at the beginning of a term; customers have unlimited access to the VM over the term. Can be done in a recurring plan as well, which is renewed usually monthly.
  • Recurring resource pooling: Customers commit to purchase a quantity of resources (number of CPU cores, quantity of RAM, etc.) in advance on a recurring basis
  • Prepaid Consumption: Customers pay a set amount at the beginning of a term, and costs of consumption are debited from this prepaid amount. Can be done in a recurring plan as well.

451 provides a list of pros and cons for each of these methods from both the provider and consumer point of view. The report does not detail the actual price of cloud computing resources, likely because those change frequently as part of what some have dubbed a price war and race to the bottom among IaaS providers. But, it does show what some of the pricing models are of the big players in the industry. Among Amazon, Google, Rackspace and Microsoft Amazon Web Services is the only one to offer on-demand, spot instance and reserved instance pricing.


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