The main tag line of cloud computing is about cost savings. This cost savings is brought about only if you intelligently choose the pricing structure that is going to suit your kind of business.
There are three models of cloud computing: IaaS, SaaS and PaaS. Each of these three models provides certain services for the clients and is charged accordingly.
IaaS: Infrastructure as a Service offers computing infrastructure and support on the hardware front which is useful for development and testing environments. The price for this service includes the cost of providing server, storage and service support over a period of time.
SaaS: Software as a Service offers all the software required to carry with your development activities. The price quoted by the service provider is. Per unit of measure, typically fully variable pricing with some restrictions, i.e., price per email box.
PaaS: Platform as a Service offers both hardware and software support to carry on with the business. The price is usually based on the service level, capacity.
This is the general rule of pricing. When the vendors offer these services to the clients, they come up with different packages with different combination of the sub services. Here, the business decision makers should use their intellect and decide what is most appropriate for them. Here is a checklist that would help you to decide on the pricing structure best for you.
Checklist for deciding on cloud pricing structure
1. Check for the hidden clauses like minimum volume levels to taken up. This would require you pay a certain amount regardless of usage
2. Check if the pricing is inclusive or exclusive of fees for upgrades of software and hardwires
3. Look for variation in the price structure for addition or removal of certain functionality
4. How would the price change with the change in volume and technology over time?
5. Any configuration and integration cost involved in switching over from the traditional applications to the cloud based one
6. Other upfront and continual costs like training, user support etc
7. Cost of termination of service. Whether the exit is smooth or entails a penalty
8. the most important one: cost of changing the business operations and process to suit the cloud environment.
Obviously, it would not be free of cost for an established business to leave the existing setup and move to a new one. But if these costs can be offset in the long run and can bring about savings it is worth spending time and money on it. But as the cloud computing technology is in the infant stage, there are lots of changes happening with regard to the services offered and the pricing structure. We would suggest you to not to enter into long term contracts in terms of volumes and time period.
The success of cloud implementation largely depends on the kind of pricing structure chosen. Therefore, this requires organized thinking and long term planning.
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