Pay as You Use

Pay as you use will be the most common costing model as applications are moving to Cloud. This is changing the entire financial view towards applications. It is the most cost efficient and sustainable model as organisation will spend on actual consumption of IT resources. For business, this will provide better margin for their product offerings.

Why Switch?

Pay as you use allows you to leverage on costing based on actual consumptions. This helps to reduce idling time in your applications. Allocations of resources can also be sized to the seasonal period. Such model are widely used for electrical utilities or mobile usage. This concept applies to Cloud where specific data consumptions can be measured and charged accordingly. Thus, this model will impact on how organisations should pass the cost savings to consumers.

The Challenges

Although cloud providers are billing in consumptions metrics, it is not straightforward to translate these to applications usage. You will need to review your architecture framework from a costing perspective. Subsequently, this translates to a change for your existing financial view on how IT is being procured, charged and allocated.

Pay as you use model will continue to effect the changes to the financial view for IT. Business will continue to demand on how these cost savings should provide value for their product offerings. Therefore, we must design the entire product lifecycle around this costing model.