Monday, September 30, 2019

Word of the Day: usage-based pricing

 
Word of the Day WhatIs.com
Daily updates on the latest technology terms | September 30, 2019
usage-based pricing

Usage-based pricing is a consumption-based pricing model in which customers are only charged when they use a product or service. Usage-based pricing may also be referred to as pay-per-use pricing or metered services.

In a flat, subscription pricing model, the user is charged a fee regardless of how often they use the service. In contrast, a usage-based charge fluctuates according to what the customer actually consumes. Usage-based billing is not a new concept; most people are already familiar with this pricing model if they purchase metered services from public utilities such as electricity or water.

Today, many software as a service (SaaS) and infrastructure as a service (IaaS) cloud providers are adding usage-based pricing options to their subscription billing models to help retain customers. Having a pay-per-use option allows customers to explore how to use cloud services in a natural manner, without spending money up-front.

Common usage-based pricing models include:

Per-Unit Pricing - customers are billed a per-unit fee immediately after use.

 

Pay-As-You-Grow - customers pay to license capacity in increments. This model is popular in data storage.  When the cutomer uses all the capacity in their initial license, they can buy an additional license to unlock more capacity.

 

Advantages

Usage-based pricing allows for an activity-based management (ABM) strategy in which business processes are evaluated and adjusted for their cost efficiency by using activity-based costing. In serverless software development, for example, this means moving from a subscription-based cloud service to a very granular function-as-as-service (FaaS) pricing model.

Perhaps the biggest advantage to purchasing products or services through a usage-based delivery model is that the model's transparency makes it easy for the business side to directly align costs with consumption.

 

Disadvantages

A major disadvantage, however, is that variable use translates into variable OPEX expenditures, which can play havoc with budgets and make financial forecasts difficult.

On the provider side, it's critical that businesses balance usage-based pricing balance with sustainable, recurring revenue. Because too much or too little usage-based pricing can compromise a business' long-term growth, many experts recommend that no more than 50% revenue should be usage-based.

Quote of the Day

 
"Without usage-based pricing, customer and business growth are severely limited, as customers lack the choice and flexibility to consume a product or service and grow naturally with it, leaving little room for businesses to upsell." - Tyler Lunceford

Learning Center

 

Weighing the pros and cons of enterprise network subscriptions
Network subscriptions can help enterprise tech buyers visualize their IT assets, curb overlapping purchases and ease deployment. But beware added costs and other disadvantages.

Network subscription packages gain steam among enterprises
Cloud and SaaS-based services have made enterprises more familiar with monthly subscriptions, paving the way for network subscription packages to grow.

Subscription and pay-per-use IoT revenue models
When it comes to IoT, monetization is key. Flexera's Eric Free explains the opportunities and challenges of subscription and pay-per-use IoT revenue models.

Networking costs swell pay-per-use public cloud bills
Networking costs from cloud security and BYOD management can easily raise consumption-based cloud computing prices - but monitoring that usage isn't as easy.

Are subscription models the new normal?
Customers are driving a shift in product delivery away from ownership and toward subscription models. Can companies benefit from charging subscriptions rather than onetime fees?

Quiz Yourself

 
Serverless computing can significantly bring down costs since you're not paying for servers 24/7, _________ of whether they are actively serving requests.
A. irregardless
B. regardless

Answer

Stay in Touch

 
For feedback about any of our definitions or to suggest a new definition, please contact me at: mrouse@techtarget.com

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Meet with a OneLogin security expert at Gartner IT Symposium 2019

 
Meet with OneLogin at Gartner IT Symposium 2019!
 

Hi David,

Are you going to Gartner IT Symposium in Orlando on October 21-24? If so, meet OneLogin at booth #1130 and discover how our Unified Access Management platform tackles complex security, productivity and compliance challenges across unique environments that include both cloud and on-prem applications.

We also invite you to attend our session, We're Digitally Transformed, Now What?, on Tuesday, October 22 at 1:30 p.m. and hear from Venkat Sathyamurthy, OneLogin's Chief Product Officer, as he reveals best practices from top CIOs on harnessing digital transformation through identity for mass security automation.

After the presentation, we would love to treat you to coffee and have a chance to chat with you about your current IAM strategy.

FYI: OneLogin was named a leader in the 2019 Gartner's Peer Insights Customers' Choice for Access Management Worldwide.

We hope to see you in Orlando!

Best,

Team OneLogin

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Ansible shakes up config automation offering

 
DevOps Digest
A roundup of DevOps content from TechTarget's network | September 30, 2019
TechTarget
FEATURED STORY
Ansible Tower revamp adds analytics, security automation
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SD-WAN Confessions | My 3-month Onboarding Experience

Hi David,

I would like to invite you to our next webinar, an enterprise success story with ADB Safegate, a global provider of airport performance improvement solutions; and  Videns , a leading Duch IT service company.

ADB Safegate had very challenging success criteria for migrating from MPLS-

  • Optimized WAN connection to the SAP DC in Frankfurt
  • Affordable WAN connectivity to the site in China
  • Improve overall stability and performance
  • Easy adding and removing sites

ADB Safegate's Director of IT Operations, together with Videns IT Services, migrated 24 sites worldwide to Cato, improving the network's stability and scalability.

Join us as we uncover the challenges, and offer a walkthrough for a successful global SD-WAN project - sharing insights and tips on how to avoid common pitfalls.

Book your place on this insightful webinar now

Save my Seat   GREEN.png



Regards,


Kim White
Business Development Manager

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Cisco bundles Webex Teams and security products

 
Networking Digest
A roundup of network technology content from TechTarget|September 30, 2019
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