Cloud Management - An Overview of Cloud Pricing Models


Overall demand for cloud computing in all its guises will grow 18% this year to $246.8 billion in total worldwide revenue from $209.2 billion, according to a new forecast from market research firm Gartner. With the cloud being the preferred platform for apps that win, serve, and retain customers, adoption of cloud services and spending on cloud services are both up.

Companies that want to sell SaaS applications to businesses must align their products' pricing with how those products deliver business value to customers. Cloud service pricing model could range from pure subscription models where services sold on a cloud catalog basis are billed per month (say per mailbox or per app license ordered) where the customer gets billed for all those resources, whether used or not. Or a model where the customer starts off with a zero account, provisions cloud resources on demand, and gets charged based on actual consumption (Pay As You Go). Another variant is an enterprise billed based on the number of active users assigned to a cloud subscription (Pay Per User). Several cloud providers offer a combination of the above models with suitable discounting options.

For Infrastructure services, customers do not accept obsolete hardware-based pricing and existing customers will refuse to renew contracts that cost more than they deliver or even cancel them midterm as they demand utility-style metering at the IaaS, PaaS and SaaS levels (platform-as-a-service and software-as-a-service). Cloud providers offer different cloud pricing models, unique discount options, and frequent price cuts to lure customers. The AWS Consolidated Billing concept, the AWS Reserved Instances (RIs) model - that are not actual instances, but rather a kind of discount coupons mechanism that can be applied to instances that meet certain criteria (region, availability zone, instance family, and operating system), the Google Sustained Use Discounts (SUD), the Microsoft Enterprise Agreement that enables enterprises to avail discounts from 15-45 percent depending on the level of usage they commit to, are pricing and discount methods offered by the cloud providers.

Whether you are a cloud provider with dynamic product offerings to monetize your end-to-end process or a partner reselling the cloud services with the partnership programs or an enterprise that adopts a secure cloud computing environment that is cost-effective by leveraging lower costs based on the enterprise discounts or tiered pricing model, Jamcracker offers a complete cloud management suite to accomplish your goal, and manage revenue settlement between channel partners.