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The Drawbacks Of Cloud Pricing Models

by Naresh Sarwan on September 1, 2011

David Strom writing on readwriteweb.com has written an article: “The True Cost of SaaS Apps Isn’t About the Browser“.  I’m not sure about the title which I take to mean a reference to the fact that Cloud apps are often highly scalable for a very low marginal cost (for software vendors at least), but the points raised are noteworthy:

  • It isn’t easy to price your cloud consumption
  • Scaling is all about better governance
  • The cloud does need special client software sometimes

The first one is the most significant (in my view):

Some cloud providers don’t have pricing available until you sign up for their service. Others make it hard to figure out. Since everything in the cloud is priced separately, to the point where pricing pages such as AWS’ here and Rackspace’s here can get very complex to figure out what your monthly bills will be. This complexity has brought with it a new class of products that attempt to predict your consumption of cloud resources, such as UptIme Cloud and a new service called Cloud Cruiser. We need simpler pricing that can be understood by the purchaser before they sign up before the cloud can catch on.” [Read More]

Having worked with some consulting clients recently to calculate costs for Cloud hosting of storage for their digital assets, I do have to agree with this.  I didn’t use the resources mentioned, but I have now acquired a new unwanted skill: figuring out the Amazon AWS pricing calculator.  If you are corporate customer and have a fixed annual budget to manage, variable ‘on demand’ pricing is potentially more of a curse than it is a blessing.

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