Cloud technology has become increasingly popular, and one of the key factors that makes cloud services attractive is the pay-as-you-go billing model. With this model, you as a consumer can accurately estimate your IT expenses for cloud usage. However, it is also important to understand how to prevent unexpected cloud bills that may occur when your actual usage exceeds what was initially planned.
Two Types of Cloud Providers
In general, there are two types of cloud service providers. The first type charges based on a predefined allocation, while the second charges based on actual usage. At first glance, this may seem trivial, but in reality it is very important and must be carefully considered when comparing the pricing models of different cloud providers.
To help clarify this discussion, I will use a mobile phone analogy.
Imagine that you are traveling to another country. Upon arrival, you have two options:
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subscribe to a higher but fixed-priced plan, commonly known as a roaming plan (for example, $15 per day for unlimited usage), or
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choose a pay-per-use model, such as $1 per SMS and $30 per minute for calls.
You might think, “I won’t be making many calls or sending many messages, so I’ll just pay for what I use.”
This alternative initially appears to be the “cheaper” option. But what happens when your office suddenly decides there is an important matter and requires you to call in for discussions, or when several customers call you for critical conversations and you need to respond to multiple messages? At first, it may not seem like a problem—until you return home and see your bill. Wow! $180.
At that point, you would likely wish you had chosen the $15 plan with more predictable expenses. Even worse, you have no other choice but to pay the $180 bill. You have used the mobile service, and therefore, you must pay for it.
Cloud Usage Payment Options
In the cloud world, you generally have two payment options. The first option is to pay a lower upfront monthly fee and then pay based on actual usage for components such as bandwidth, disk I/O performance, load balancer usage, VPN usage, and others. The second option is to pay a higher fixed fee to a cloud service provider that includes all of these components as part of the base cost.
If you are very confident in your usage plan, the pay-as-you-go model may be ideal for you. However, if your usage is unpredictable and may suddenly increase, it may be better to choose a fixed-cost plan with unlimited usage. Clearly, there is a break-even point between these two models, but this varies from one cloud service provider to another. The key is to fully understand all elements of the pay-as-you-go model and how quickly (and easily) additional charges can be incurred without you realizing it.
Let us take AWS and IndonesianCloud as examples (prices are for illustration purposes only):
For AWS, for example, the cost is $75 per month for a node with 2 CPUs, 4 GB of RAM, and 100 GB of disk space. This package includes 1 GB of monthly internet data transfer. If you require more than 1 GB of internet data transfer, you will be charged $0.10 per GB. For disk performance, you will be charged $0.01 per IOPS. If you require a load balancer, you will be charged $55 per instance. Additionally, if you want to use a site-to-site VPN connection, you will be charged $25 per connection.
For IndonesianCloud, for example, the cost is $150 per month for a node with 2 CPUs, 4 GB of RAM, and 100 GB of disk space. However, this package already includes guaranteed CPU GHz, guaranteed disk IOPS, unlimited data transfer, free load balancer usage, and unlimited VPN connections.
Choosing an Affordable Cloud Service
If you are confident that you will not require a load balancer, do not need VPN connectivity, and do not expect to transfer more than 100 GB of data, then AWS may be the more cost-effective option. However, if you require these additional services, IndonesianCloud is clearly the more affordable choice.
It is important to note that some elements of AWS are beyond your control. For example, internet bandwidth usage—if your AWS instance is compromised or attacked by a DDoS, resulting in high bandwidth consumption, you will still be billed for that usage. This means you must monitor your usage continuously. In contrast, with IndonesianCloud, you pay a fixed fee without the need to monitor usage on a minute-by-minute basis.
Therefore, as a cloud service user, it is essential to understand your usage profile. Can you accurately predict your usage? Can your business tolerate variable monthly costs, or do you prefer predictable monthly expenses? The choice is yours.
IndonesianCloud offers a transparent and predictable billing policy. All costs are known upfront, with no hidden or unexpected charges.
Neil Cresswell
CEO, IndonesianCloud
That concludes our explanation. If you would like to read more articles about technology or need further information about IndonesianCloud’s products, please visit our website at Indonesiancloud.com, or our VPS website at cloudhostingaja.com. See you in our next article.