Utility pricing is key

Cloud hosting infrastructures have a number of unique advantages over traditional dedicated infrastructures. One of those advantages, a key part of any cloud infrastructure model, is the utility pricing model. Here’s a key point to understand: the customer always overpays for infrastructure and never underpays when using traditional hosting. Traditional hosters oversubscribe infrastructure such as bandwidth and storage. Customers pay for bandwidth and storage reservations as part of their selected hosting package. They also pay for any overages beyond their infrastructure reservations. In other words, a customer pays for a reserved amount of bandwidth or storage whether or not they are actually using that infrastructure. In the cloud model the customer only pays for the infrastructure they consume. They can scale the infrastructure up or down as the needs dictate. In many cases the infrastructure unit pricing goes down as the customer’s needs scale up.