The benefits of a pay-as-you-use model

According to our experience, most CXO’s who say “no” to a new technology, do so  simply because the entry cost in terms of both Time and Investment is very high, not because their business doesn’t need it or find it useful.

 “Are you paying too much for your Traditional/On-Prem/perpetual software and or solution?”  should be one of the main questions being asked directly to your customer. The pay-as-you-use model may be the solution that you need to respond to that.

Every year, organizations see their cloud spending grow, and the majority of them are struggling to handle the cost, because they are over budget already by an average of 23 percent, yet expecting their cloud spend to increase by 47 percent over the next year.

In the last year, the estimation of wasted cloud spend was around $14.1 Billion, and this value is probably on the low side, because this calculation doesn`t include the waste accumulated through orphanage resources, suboptimal pricing options, misuse of reserved instances, and more.

The real question that must be answered is how to minimize the consumption billing in your business. The essential point is to have a cloud solution that only charge the customers for what they use. This option beyond of the price reduction, also offers more control over the cloud payment options. 

How can you offer different types pricing schemes?

The options of pricing models to choose from, are several, including various subscription that you pay-as-you-go. Let`s quickly check the most popular options to choose from:

  • Subscription based: This model required an up-front payment for a fixed number of seats. In this model the customer has a monthly or yearly fee to access the service and are active for the subscription period/limitation and the service providers give options for monthly automatic or manual renewals. 
  • Free plans: These usually last for a fixed trial period, and at the end of that time you have the option to pay and continue or simply finish the plan;
  • One-time plans: this option have only one payment at the moment of checkout;
  • Tiered pricing: This option is similar to a plan with a flat-rate pricing, but also have a varying price point for different packages;
  • Pay-as-you-use plan: this pricing model have a set price defined per unit, with also layered pricing limits. In this plan the provider has the possibility of track usage and bills accordingly, so the user only pays for the services that are being used by him either fully or partially. Also, there are various service providers that charge for the time when the customer is using the resources. This model is mostly used in SaaS model.
  • Hybrid Pricing: This is the combination of the subscription model and the pay-per-use model where the services must be provided in advance for a limited period of time.

Why CloudCockpit advices for the pay-as-you-use pricing plan?

The main benefits for the customer is the possibility of tracking usage and payment history at the same time they can see their receipts, orders, balance, and upcoming renewals. This aspect maximizes the degree of control and transparency in the payments, but also in the usage which many customers find very important and useful for their business. 

As we reviewed  in our past article , its All About The Customer by having a clearer pricing, transparency and Value perception, you can focus on delivering additional Services and Value that otherwise would be already consumed either by another partner or by an over-sized solution.

With CloudCockpit you do not need to do an initial investment and you pay a monthly fee according to your business volume. This is a risk-sharing model since the cost of the platform is directly related to your business.

The main benefits related to the cost in this model that is provided by CloudCockpit is that you do not have a setup fee, no fixed costs, no minimum. 

With us, you can finally achieve this CSP Pay-Per-Use model and start delivering it to your clients