Cloud Computing Pricing Models


These days, cloud computing is becoming a necessary routine for providing network services on computing resources. This technology allows you to share scale, demand, and costs with a large number of end-users. It allows users to efficiently process, manage, and store data at very high speeds at a reasonable cost. Cloud computing customers do not need to install software and access their data from any computer in the world with an Internet connection. There are many definitions of cloud computing. Though, researchers defined cloud computing as “a comprehensive, cost-effective concept of scalable computing that provides third parties with a set of abstract, virtual, powerful scalable calculators, storage, platforms, and managed services.”

Cloud Computing – Pricing Models

Cloud Computer provides a variety of Service – Level – Agreements (S-L-A) based IT services between service providers and users. A typical goal of a cloud computing company is to maximize revenue through its pricing system, but the main goal of customers is to maximize Quality – of – Service (Q-o-S) at a reasonable price. Therefore, the best pricing methodology is needed to satisfy both parties. 

Prices are a crucial factor for organizations that provide services or products. The way pricing is influenced by customer behavior, loyal suppliers, and organizational performance. The price set for a service or product must take into account production and maintenance costs, competition in the market, and how the customer evaluates the service or product offered. The researcher analyzed possible pricing models that can be used by different organizations. Their study showed that price relates to many features of the pricing model. This approach allows for solving many price problems between buyers and suppliers.

Software companies use a lot of pricing techniques for the cloud. For example, a typical pricing method is one-time for unlimited use. However, this method is inflexible and ignores many other factors that affect prices, such as the age of resources and prices. Many large cloud service providers such as Amazon – Web – Services (AWS) use pay-per-view, which charges users based on the total use of their resources. Therefore, AWS certification training is considering as an essential factor for the adoption of the cloud. 

On the other hand, “Resource payment” is another technology that charges consumers based on the size of the store or the bandwidth offered. It describes the discussion between the supplier and the customer about the service offered. The final agreement will be confirmed by the parties. SLAs may include service quality, pricing, warranty, and similar contracts.

Different providers use different prices and plan models. The bandwidth or storage space used is paid for by the customer. It is also a regular order when the customer pays in advance for the cloud service received in a given time. The researchers proposed a new financial and economic model that could provide excellent customer service. They used theories of financial capabilities and treated cloud resources as assets to achieve their real value. The price determined by this model was the optimal price charged by the service provider to its customers to reimburse the initial costs. 

The theory of capitalism has set a lower price than customers should charge. Price limits are determined by Moore’s laws. These laws combined Moore’s laws with a compound interest rate formula. The researcher proposed an algorithmic solution to maximize the net profit of the data center through timely planning while increasing revenue and minimizing the costs. They developed two algorithms for optimizing distributed profits.

Features and Attributes of Cloud Computing

Cloud computing offers its customers numerous benefits. The researchers described the main features of cloud computing, including on-demand self-service, extensive Internet connection, resource pooling, fast resilience, and reasonable service. However, they further described the best cloud computing skills that can be used to meet new challenges to develop new cloud approaches managed interface, location independence, independent action, virtual business environment, strategy, and fast-tracking.

Cloud Computing – Service Models 

It is believed that the service provider usually rents the device to customers for every use. Therefore, the price represents the allocated amount. Other I-a-a-S resources include IP addresses, firewalls, load balance, virtual machine image library images, and local virtual area network (V-LAN). The other main service model offered by the service provider is the P-a-a-S. These types of services provide customers with an IT platform. Designers benefit tremendously from it because they can hire sophisticated hardware and actively modify operating systems as they develop their applications. The downside is that – it has no flexibility and may not respond to changing customer requirements. On the other hand, S-a-a-S has several advantages, such as seamless management, flexibility, global availability, and compatibility.

Cloud Computing – Deployment-Models

In the general cloud model, services in the cloud are available to the public on the Internet. This service can be free or paid for each use. In a hybrid cloud, the service provider is responsible for external IT resources and internal resources. It can be considered to contain a public and private cloud. In a community cloud, the cloud environment shares several institutions in a given community with similar goals.

Pricing-In the Cloud

It is confirmed that the success of cloud computing in the information technology market can only be achieved by developing appropriate pricing technology. The evaluation procedure can be as follows: fixed, where the client is charged the same amount all the time; dynamically, where the price of the invoice varies or depends on the market, where the customer receives an invoice in real-time based on market conditions. Fixed pricing methods include a fee for each use, whereby customers pay for the amount of product used or the time spent using a particular service.

On the other hand, differentiated pricing means – the price varies depending on the functionality of the service, the characteristics of the customers, and the quantity of the purchased quantities of the customers. However, depending on the market price, it depends on real-time market conditions. The older the resources, the lower the asking price. It is because resources are wasted over time, and their monetary value is reduced. It is the amount that the service provider spends each year on cloud maintenance and protection.

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