The Seismic Shift in IT Infrastructure Finances: Part One

Usage Based Billing

Cloud providers leverage a usage-based billing model which is one of the major arguments for migrating to the cloud as you “only pay for what you use”. Such a model does provide great benefits as it greatly increases the rate of innovation if you don’t have to wait for a business case to be done and a server rack to be shipped and setup in your data center to start a new initiative. It does; however, have downsides as well. Given the ease and speed of provisioning, we frequently see the creation of resources that are not necessary, over provisioned, or resources that are not turned off or deleted when they should be. These resources typically sit incurring costs until the bill rolls in at the end of the month and there are charges that were not anticipated resulting in shock and panic to the individual receiving the bill.

Billing Complexity

Cloud providers have been rolling out new features and services at a rapid pace with little signs of slowing down. This presents enormous opportunities for organizations to use these innovations to accelerate their business. With these additions, it also continues to grow and complicate the monthly bills. Given service interdependencies and the variety of charges that can be incurred per service, bills have become extremely complex for large organizations. When you come across articles titled “How can I see why I was charged for CloudWatch usage, and then how can I reduce future charges?” it definitely raises some concerns. The snippet below displays a tiny segment of a much larger and complicated bill.

Sample snippet of an AWS bill

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Steven Muschler

Steven Muschler

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Technology consultant with an emphasis on enterprise data platforms and cloud economics