cloud glossary

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Consumption-Based Pricing Model

Consumption-Based Pricing Model
"This pay-as-you-go model means usage is metered and you pay only for what you consume. The fundamental economics of cloud computing are based around the premise that customers will pay for how long a server is used, or how much bandwidth data is being consumed. This offers many cost savings opportunities for businesses as they can optimize their infrastructure to reduce idle time. All three major cloud providers offer a consumption-based pricing model for nearly all of the services that they offer." A consumption based pricing model is also known as a pay as you go model, and usage based model.
in other words
Paying for what you get.
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The value of consumption based pricing

For companies looking to stay lean or that are bootstrapped, consumption based pricing offers an effective model to keep costs low, and that can scale as you go. F

or software providers, consumption based pricing creates lower barriers of entry for your customers, while also ensuring increases in revenue as your customers grow.

Consumption based pricing model software

Consumption based pricing model in the software industry is incredible common. Some examples of companies that offer consumption based pricing are web hosting and online database providers, as well as tools like email marketing platforms. Examples of companies providing a consumption based pricing model are Azure, AWS, Mailchimp, and more.

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