Top 5 Models of Cloud Cost

Cloud computing has emerged as the most sustainable and cost-effective way to launch applications and manage workloads for many businesses. It provides flexibility in terms of scalability, reliability, and cost. With the right cloud cost model, businesses can optimize their costs and get the best value for money. There are five major cloud cost models: pay-as-you-go, prepaid/fixed subscription, reserved instances, AWS savings plan, and spot instances.?

1. Pay-As-You-Go is the most popular cloud cost model. It requires customers to only pay for what resources they use as they go. This is ideal for organizations that need the flexibility to scale up and down their usage as needed.
2. Prepaid/Fixed Subscriptions allow customers to pay a fixed monthly fee for a set amount of cloud services. This is a good fit if you have a predictable workload or need a fixed price.
3. Reserved Instances allow you to pre-purchase capacity at a discounted rate. This is a great way to save money if you need to maintain steady-state usage of your cloud services over a long period.
4. The AWS Savings Plan provides even more discounts than Reserved Instances by committing to a certain amount of spend over a one or three-year period.

AWS provides three different kinds of savings plans:

• Compute Savings Plans - apply to all EC2, AWS Lambda, and Fargate consumption of Amazon compute services.
• ?EC2 Savings Plans- Only applies to the use of Amazon EC2 instances.
• SageMaker Savings Plans – suitable for the SageMaker usage

Savings plans provide three ways to pay:

• No upfront- No prior payment is necessary; consumers are billed each month based on actual consumption.? It offers a minimal savings discount plan.
• Partial upfront payment – By paying the partial payment of your services to act up front, you receive an additional discount, and the remainder will be billed every month.
• Full upfront payment - This option provides the biggest discount to users.

5. Spot Instances allow customers to bid on spare capacity in the cloud at discounted prices.? This is the cheapest option for organizations that need short-term or unpredictable usage.

No matter what type of organization you are in, these five cloud cost models will provide you with the flexibility and cost savings you need. With these models, you can optimize your cloud spending and ensure that you are getting the most out of your cloud investments.