As the cloud space continues to mature and expand with new providers coming on line, host companies have begun exploring alternative pricing options for service. With the major price cuts among providers, long-term contracts that freeze prices have begun to look like a bad bet for businesses.
One new model for affordable cloud hosting being explored by certain providers involves hourly billing for service. While this certainly has some advantages, especially for users who may not need full blown hosting, it can be unpredictable in terms of budgeting and planning. Companies tend to underestimate or oversimplify their needs and that means they may be paying more than they need to, saving much less than they could.
The Choice Revolves Around Your Business Needs
The first step is to examine how you are using your existing services. If you are a fixed monthly pricing plan are you using all of the services that you’re paying for? Do you find yourself not taking advantage of all the storage, data transfer, or bandwidth you’re paying for? As prices for affordable cloud hosting decline, are you tied into a fixed price contract that could in fact result in overpaying for services in the future?
Think about this in terms of the airlines and how they address pricing. While airlines may cut some prices for travelers such as airfare, other areas experience increases, such as baggage fees or prices for travel during peak times. This means that travelers might not experience the advertised price reductions during normal travel usage. The cloud space works in much the same way.
While some host providers may be advertising affordable cloud hosting through lower prices for hourly billing, this may not translate into savings to you, depending upon your business needs. Often these lower prices are based on certain configurations or services that you may find unnecessary for your business. Typically, a cloud consumer uses a mix of services. Some of these may be impacted by price cuts, others not so much. Because this is the reality, it becomes important to analyze exactly what you are paying for your “full-service” hosting.
Unfortunately, cloud providers aren’t all that clear about what is effected by price cuts or how narrow these cuts may actually be. It can be difficult to determine because public cloud pricing and billing is often so complex that it becomes almost impossible to determine how advertised price cuts or hourly billing may benefit your existing services.
The fact remains, that while hourly pricing may look attractive at first, and may offer benefits to certain segments of cloud users, reserved pricing (or paying a monthly fee) may turn out to be the better choice for your business’s affordable cloud hosting needs. Delve deeply into any existing service contracts and bills and do your due diligence before switching to hourly billing. You may find that that your contract is providing budget stability, enough scalability and all the services you need and maybe even saving you money over the long-term!