Most startup founders are faced with a complex decision of choosing a cloud provider. The pricing models from the vendors make the decision even more complicated. The service-vs-service comparison is difficult to come up with. This makes cloud adoption journey, not an as easy one for the startup founders.

This article will help you with the cloud pricing offers. Also, you can choose the best model that suits your business needs.


Underlying all cloud computing offers there is inherently a bundle of services that include CPUs (virtual core or virtual CPUs), RAM, storage, and then the associated payments for using all the services.

You need to first select the general approach to setting up your infrastructure and then you move down to the exact configuration that meets your requirements. The options available for the macro configuration are a mix of infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS) resources.

Then comes the question of pricing.

Pricing Models

As a customer, you need to get a subscription that comes with basic compute resources (IaaS or PaaS). Then you also need to include other necessary services like database, AI, machine learning, IoT, access management, and so on. All these extra value-add services are priced in addition to the basic PaaS or IaaS.

Now, let’s try to look at the pricing models that most of the cloud vendors are offering.


Almost every cloud provider will give you the option of either limited time or limited-capacity access to their resources. Here the idea is to hook you with some experimental application.

This helps you to try out the interfaces and options without any upfront commitment.

Ideally, such offers are suited for test/dev environments and not for the full-blown production use.

Pay as you go

This option lets you use cloud computing with no upfront investment or commitment. There is a catch though, you are paying a higher fee on per time unit basis vs other subscriptions. Still, it’s a good entry point for those who want to start small and scale afterward.

In terms of scale, this option might not be the best one to pursue. Your costs scale with the growth of your computing requirements, and that too at much higher rates than the other pricing models.

Reserved Instances

Here you are made to reserve your cloud instances and in return, cloud vendors will offer you deeper discounts. This model is useful for application that is always-on and you know the kind of workload expected.

This option does provide a considerably lower per time unit rates.

The key to utilizing this model is the understanding of your resource requirements, currently, and in the long term.

Managing Capacity Excess or its Shortfall

Most of the cloud vendors will provide you with the option of managing ad-hoc boost in capacity. With this model, you have the option of acquiring more resources to match sudden bursts in demand.

On the flip side, if you have excess capacity, you get the option of scaling down unused capacity. The mechanism in which this happens differs from one cloud vendor to another. Some cloud providers will offer a guaranteed return value, while others might require you to sell excess capacity to other customers.

Batch Computing

You might have jobs that require computing but can be done off-hours. So, cloud providers do offer such mechanisms, where you can use spare capacity at significantly reduced costs.

This pricing model is ideal for non-urgent batch jobs at off-peak times. If done right, this mechanism can help you to significantly reduce costs.

Summing Up

Cloud computing is an industry de-facto. And the cost is one of the most important factors in determining the right architecture and choosing the right cloud provider. By knowing more, as a founder, you can get the most monetary benefits from cloud computing.