Pay as you go cloud service is a cloud computing service that charge consumers depending on the services that they use. It is very significant as it helps in reducing wasted resources (Jaatma 23). The service can be compared to utility bills which utilize only the resources that are needed. The model is most appropriate for applications that have short term, spiky or unpredictable usage. There is no upfront commitment in this type of model.
Merits of pay as you go service
There are many advantages of using the pay as you go services, especially in the graphic design business. The needed resources like computers will be reserved for the paid period of time. One of the most significant advantages is the fact that it will be possible to improve the visibility of technology costs, for example, the computers (Macias and Guitart 34). By using this service, the business venture will be able to link financial costs to particular initiatives like buying new equipment and getting services for the equipment; these will result to a better accounting practice in the business. The procurement cycles in the business will be significantly shortened because the business will not need to use traditional procurement processes (Zhang, Cheng and Boutaba 27). Utilizing the pay as you go services helps in increasing speed and flexibility in the business procurement services. The service will only allow me to pay for only the resources that are used. There will be no term commitments and term contracts, the model will be excellent for all the short term projects and can be used in disaster recovery and proof of concept.
Weaknesses of pay as you go
Despite the benefits that it will provide to the new business, the pay as you go will have some weakness as well. Business goods might be reserved for long than is required. One of the main weaknesses with this type of service is the fact that it will not offer many plans and options; in most cases it will not offer flexible services (Lehmann and Buxmann 16). Security is also of big concern; this is because the pay as you go services will require the business to give out private data and information, the data may be sensitive and confidential, the privacy in the cloud is of big concern. Service set up is solely dependent on internet; network problems can make service set up inefficient.
Concessions needed in order to use or not to use pay as you go.
In determining on whether to use pay as you go services, the most important concessions that should be considered include the scale of the services meaning the number of suppliers that the service is able to target, the scope; this is inclusive of the applications that are offered under the model and the integration (Macias and Guitart 28). In the integration, determination of how applications can be embedded in business should be considered. In case the services meet all these requirements, then it can be used in the business.
Alternatives for pay as you go service
There are many alternatives that can be used besides the pay as you go good examples can include the pay for resources model, subscriptions and a novel financial economic model. One of the main advantages of this model is the fact that it offers a maximum utilization of the service provider resources, its main weakness is the fact it is very hard to implement. In subscription, the price is based on the period of subscriptions; there is the likelihood for the customer to underpay for resources reserved if he uses them extensively.
Jaatma, J. “Financial aspects of cloud computing business model.” Inform Syst Sci (2010): 23-34.
Lehmann, S and P Buxmann. “Pricing strategies of Software Vendors.” Business and Information systems Engineering (2009): 17-34.
Macias, M and J Guitart. “A Genetic model for pricing in cloud computer markets.” Proc 26th symp of applied computing (2012): 25-46.
Zhang, Q, L Cheng and R Boutaba. “Cloud computing: State of the Art and Research Challenges.” Internet Services and Applicat (2010): 24-35.