Top 9 Cloud Cost Models Explained

To ensure customer retention, leading companies choose the best clouds for their functions. Cloud computing, in all of its manifestations, is becoming more popular. This growth is expected to be 18 percent by 2020. From 209 billion dollars to 246.8 billion dollars globally. (source: Gartner) In this article, we will take a look at some of the most popular cloud cost models that you should know. Along with it, we will also provide you with top online cloud computing courses and certifications so that you become a skilled cloud professional.

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Each company's cloud computing architecture is distinct. Thus, each client's cloud computing services will vary. To get the true benefits of cloud computing services, different companies will employ different cloud cost models that fit their infrastructure as well as market (based on customer demand)

Cloud cost models for cloud computing can be classified into four types based on four major parameters: value, fact, demand, and supply. While categorizing cloud cost models into different categories and strategies, other elements such as cloud services, corporate strategy, competitive market landscape, investment budget, and targeted customers are taken into account. Three costing methodologies and a 3X3 value matrix create a conceptual framework for investigating systematic cloud cost models.

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What are the Cloud Cost Models?

Because supply and demand fluctuate, cloud cost models are dynamic in nature. These are time-based, cost-based, or auction-based, and are based on numerous variables. Subjective (value), objective (truth), and market-based cloud pricing models are available. The market-based cloud model is driven by an equilibrium of supply and demand, whereas the value-based cloud model is driven by supply.

Moving from pure cost-based cloud cost modeling to both value-based and cost-based cloud cost modeling presents research problems. Moving from stateful to stateless pricing, changeable to permanent/irreversible pricing, and designing and developing cloud cost models that entice cloud clients are all problems. According to this research, sixty different cloud cost models have been identified.

Different Cloud Service Cost Models

1. Customer Value-Based Cost Model

It determines the pricing based on a client's subjective viewpoint and value delivery. Perceived value, feature, psychological, and hedonic-based cost models are the four types of value-based cost models. Perception, sociology (big surroundings), economics (utility), and psychology are all used to build these models (utility). The customer value-based cost model optimizes profit and market share for the company.

2. Performance-Based Cost Model

According to M. McNair's definition, it is a contract in which the seller is compensated based on the exact performance of a cloud service or model. It's linked to the business results of a client, which is based on certain performance criteria. Multi-party video conferences, Mobile applications, and satellite connectivity are all examples of applications for this approach.

3. Service-Based Cost Model

With tangible product-oriented pricing, it focuses on value delivery for the client’s cloud computing architecture. Top industries that employ service-based cost structures are hospitals, travel, insurance, Banking, airlines, legal consultants, and so on. The value of the service-based approach is quantified in levels, tiers, per device, customer, and priority. This model's worth can be determined and forecasted.

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4. Retail-Based Cost Model

This model focuses on a specific number of clients who purchase products from physical stores. The B2C (Business-to-Consumer) model is covered. product mixing, allowances/discounts and promotional, and discriminatory pricing are the four subdivisions of the cost model.

5. Expenditure Based Cost Model

The cost of a central component is determined by using the application as a unit of charge. Cloud Cost models include cost-plus, target return, and percentage cost models.

6. Resource-Based Cost Model

The usage of services for a cloud computing architecture determines this cloud cost model. It falls within the cost-based cost model strategy category.

7. Free Upfront and Pay Later Cost Model

The need for cloud services is driving up competition between cloud service providers. Many cloud service companies provide the option of free upfront and pay later pricing structures to get more consumers and benefit from premium clients by leveraging their services with basic functionality for the cloud computing architecture. There are three cloud costing models available: free product cost on marketing, freemium, and razor and blades.

8. Auction and Online-Based Cost Model

This model determines the pricing. The fast growth of cost model in cloud computing demands better cloud resource pricing and allocation systems. Since the demand for cloud resources and their features are not uniform, dynamic pricing and allocation techniques are convenient. So the goal is to optimize cloud resource utilization, increase cloud provider revenue, and lower cloud consumer rates. So auction-based pricing and allocation mechanisms work the best as the customers who value the product the most are allocated the resources.

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Conclusion

Customers can choose from a variety of resource-based on-demand models to subscription models (Pay Per User) for their cloud computing architecture. Whether the client utilizes services or not in the subscription model, they have to pay a specific amount. But in market-based cost models, it is 'pay as you go'. Based on the cloud service provider, a subscription plan that includes both can be supplied.

Now that we have gone through these cloud cost models, you might want to check out top online certifications in other trending trends. Take a look at the following list, where we have compiled online certification courses, degrees, diplomas, and so on.

Now that we have gone through these cost model in cloud computing, you might want to check out top online certifications in other trending fields. Take a look at the following list, where we have compiled online certification courses, degrees, diplomas, and so on.