Pricing Based on UseSo why did the costs change so much and why was this increase so unexpected? Well, the way in which hosting costs are calculated varies significantly between cloud and a more traditional hosting organization. In a more traditional hosting setup, the hosting organization offers particular products, each which has a set capacity, including processing power, memory, storage space and network bandwidth. Companies decide which options fit their needs and pay a monthly rate. At that point, a company should pretty much know what its cost will be as long as it stays within certain traffic, storage and processing limits.
Here's where things get tricky though: The capacities may be more than what that company actually needs, so the costs can look more expensive than they actually are. Compare that to a cloud hosting service where the company pays only for what it uses. The advantage here is that many companies start out with lower capacity requirements than what comes with a standard, predefined package from a hosting organization. This means a lower cost at the outset. But as traffic grows, guess what? The capacity the company requires increases, and so does the cost. Furthermore, that cost will vary month to month, making it harder to budget for over time.
Cloud Hosting Is a Good Fit ... For Some Now, I’m not saying that cloud hosting is bad or has hidden costs. In fact, it provides a great opportunity to get a pilot application out to market relatively cheaply and then to be able to scale this to meet demand. I can tell you from firsthand experience that it is much harder to migrate an application to a newer, bigger box than it is to elastically scale this in place. But companies need to consider what they’re paying for. The benefit of elastically scaling the capacity for applications comes at a price, a fact that needs to be weighed against the available budget and the flexibility of that budget.
Before cloud hosting was available, I’d seen many organizations who built a pilot application and hosted it using a low-cost option, fully expecting to change the hosting as the client base grew. I call that the suck-it-up-and-see approach!