The current pricing of Cloud services offers a wide range of configuration,
choices and price points for the users. This in turn creates a lot of
confusion for the buyer as it's difficult to measure the value at a specific
price point. The objective of this article is to analyze the existing pricing
models and reasons behind why there is so much diversity. In the following
four sections, this article attempts to:
Compare approx. 27 models of pricing derived from the scholarly articles
Recommend a derived pricing model relevant to the cloud services. Validate
the model by mapping it to the pricing of services by few key vendors.
Analyze reasons behind the pricing in use by various vendors and future
1. Generic Pricing Models
Osterwalder (2004) classified the pricing models around fixed, differential
and market based pricing. He suggested that the fixed and ... (more)
Commodities are usually produced and/or sold by different companies with no
perceived difference in quality and product / service offering. This is true
for any commodity - wheat, oil or electricity - at least in an ideal world.
Commodities are also full or partially fungible. Fungibility means all
instances are considered equal. Okay.
Now let's take IaaS which provides raw compute power. Compute power is a
function of multiple factors - data center, processor configuration, CPU
speed, compiler, kernel, file system, os, RAM, Disk, etc. On top of that
providers create multiple con... (more)
With the cloud space getting crowded each day, cloud service providers list a
host of benefits by moving to the ‘Pay as you Go' model.... Among other
benefits, reduced capital expenses (fixed Capex costs), and increased
operating expenses (variable Opex costs) is listed as a key benefit.
The article attempts to analyze this.
In general, from an accounting perspective, by shifting from a capex to opex
based model, the benefits can be many. Some of these could be:
Use of Opex allows deducting expense in the current year and reduces tax
liability applied on net income. Opex benefits ... (more)
As per Wikipedia, a typical supply chain is a system of organizations,
people, technology, activities, information and resources involved in moving
a product or service from supplier to customer. Supply chain activities
transform natural resources, raw materials and components into a finished
product / service that is delivered to the end customer. In sophisticated
market systems, used products may re-enter the supply chain at any point
where residual value is recyclable. Supply chains link value chains. As per
Wikipedia, a typical supply chain is a system of organizations, peopl... (more)
1. Cloud and Mobility - A Match Made in Heaven....
Cloud computing is providing organizations with low-cost applications and
storage, making it easier to manage the growing amount of information.
Increased adoption of cloud-based systems (IaaS, SaaS, PaaS and everything
else) in the enterprise will pave a way for a faster pace of adoption and
acceptance of the cloud-based back end for mobile devices. With increased use
of smartphones, tablets in enterprise (BlackBerry, Nexus, Surface, etc.),
increased acceptance of BYOD, more and more business information and data
will be moved o... (more)