Cloud Billing : Monetization Models | Subscription Based | Usage Based Billing Models for Cloud Service Providers

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Cloud Billing - Monetization
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Cloud Monetization Models
Cloud Monetization Models
Subscription model (Company provisioning)
Subscription model (User provisioning)
Pay As You Go (Usage based)
Combination of the above models

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Subscription Based Billing (Company Provisioning)
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Subscription Model (Company Provisioning)

• Concept
• Flat Rate Billing , typically monthly Recurring
  Revenue.
• Pros
• Suits CSPs moving to the cloud as they
  understand that SaaS is generally a recurring
  revenue business
• Suits cloud consumers instead of upfront
  investments on licenses maintenance fees
• Cons
• Inadequate for providers who need to bill based
  on consumption
• Not beneficial for customers who expect to be
  charged based on the consumption behavior 

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Subscription Based Billing (User
Provisioning)
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Subscription Model (User Provisioning)

• Concept
• Based on the actual number of users assigned to
  the SaaS service
• Pros
• Enterprise benefit as billing starts when
  provisioned to individual users
• Model is reflective of the enterprises license
  pattern
• Cons
• SaaS software entitlements need to be managed
• May not be useful to CSPs as it may result in
  loss of revenue when licenses are not assigned to
  enterprise users

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Usage Based Billing
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Usage Based (PAYG) Model

• Concept
• Based on the actual usage of the cloud service
• Pros
• Pay only for the actual volume of resources
  consumed
• Possible to optimize and control cloud spend by
  governance
• Cons
• Enterprises have difficulty in predicting the
  cloud expenses
• A bill shock likely without effective policy
  control and enforcement
• Metering the usage and providing granular details
  is complex for CSPs/Resellers

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Subscription Based (Company) Usage Based
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Subscription Based (User Provisioning) Usage
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Single Service with Flat Rate Usage
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