Evaluating the types of cloud costs
Before we get to define a cost model, we must understand what types of costs we will be faced with in the cloud. It’s important to have teams understand how costs are being allocated and to have a centralized, controlled, and consistent cost allocation strategy.
A typical cloud deployment model is pay-as-you-go (PAYG) and that’s OK when the usage of the cloud is limited. Most enterprises will have larger landscapes in the cloud, including critical systems for their business. The company would want to have the guarantee that workloads will always be available, and that capacity is always available. For this, there is the principle of reserving capacity. Reserving capacity—or pre-committing—will bring companies benefits. The first benefit is that they’re sure that capacity is reserved for them and thus available for a longer, contracted period.
The other benefit is that they can have discounts...