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  • WRITTEN BY Jorge Rojas POSTED ON May 27,2016

Not too long ago, cloud computing was considered more of a luxury than a commodity. Nowadays, however, many companies, even those who are just getting their feet wet in the business environment, are fully capable of using the cloud for all sorts of purposes. As the cloud transforms into a more accessible technology, many large companies have pushed their cloud platforms to offer secure storage, software deployment, and communications, in an effort to reduce costs.

The innovators of the technology industry have begun to implement new cloud pricing models that charge customers by the amount of computing they use, rather than relying on service agreements that limit them to a certain plan. Though this change is only currently happening with software giants like Amazon, Microsoft, Google, and a couple of others, it’s easy to see how this method could result in a more sustainable system than the service offerings that are offered today.

Providers Want to Maximize Profits with Usage Tracking
Cloud providers used this boom in cloud computing to make these changes happen, but it still took quite some time to implement the required shifts. Platforms like Salesforce utilized cloud computing by providing access to simple web user interfaces. Amazon Web Services would then proceed to develop and deploy a set of services that were accessible through a similar web-based interface. Services, such as data storage, computation, and support, were provided to organizations, at a price that could be changed to meet their specific needs. The fact that these services could be accessed anytime, anywhere, added to their value.

It didn’t take long for these service packages to find homes amongst other cloud providers. Your business could find data storage, infrastructure, development platforms, software, and so much more, all by entering into a service agreement with their choice vendor. As these services began to be procured and offered by smaller companies, larger enterprises that had been offering similar cloud packages sought to attain the highest profitability for their services. Raising the price of these services could have worked, but would directly affect demand for their product – especially with smaller cloud computing vendors available to choose from.

Instead of increasing their price and risking patronage from their loyal customers, Amazon, Microsoft, and Google are preparing to go to a “serverless” cloud computing pricing model. This basically means that instead of paying for a service package, organizations pay for the services that they actually use the platform for. Think of it as a toll-based system, like with how much an electric company might charge you. It’s a fixed rate per amount of utility.

Consumers Actually Pay for the Cloud Services They Use
If organizations have a sophisticated method of tracking how often customers run code with their cloud services, the cloud provider can set up a pricing model that can accurately gauge the value that the customer is receiving from their cloud services. To put it simply, organizations that use more will pay more, while those who use less will pay less. By implementing this pricing model, large companies will inevitably take over a larger share of the cloud industry. Demand for cheaper computing, no service contracts, and reliable support is more pressing today than it has ever been.

This great new way to push the limits of technology isn’t without those who would look down on it. There are some who believe that this change in pricing won’t benefit consumers or organizations in any way. Yet, analytics continue to become more important than ever before to enterprises, and in the case of cloud providers, those who can’t adapt to this shift simply won’t be able to compete with this pricing platform. By offering their own modified system, one that will allow them to take advantage of the price trend without gouging their loyal customers for more money, companies may yet hang on to their market share.

Cloud growth has changed the way that people view the acquisition and management of computing resources, and it’s clear that with this new pricing model, cloud providers will only continue to innovate and provide new services with a pay-as-you-go system. To learn more about the latest trends in cloud computing, or to set up your own system for a hosted computing infrastructure, give us a call at (416) 256-9928.

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