Service costs

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With public cloud computing you pay only for the computing resources you use or subscribe to. This makes budgeting easier if you understand your supplier’s price structure and you can predict confidently your usage. I will discuss the
price structures of the three main service models below, but, before I do that, here are some more questions to ask your potential providers:

  • What computing resources are chargeable?
  • Is there a minimum price to pay per month?
  • Are there additional costs for support?
  • Are there any taxes or third-party services to pay for?
  • Are the prices likely to change and what notice period is given?
  • Are there any additional costs for software licences or operating systems?
  • Are there any charges for retrieving and transferring data on terminating the agreement?
  • Any other hidden costs?

Software as a Service costs

With Software as a Service (SaaS) you usually pay for the applications you use and the users you entitle to use them, and you pay per user per month, although in some cases you have to pay for at least a minimum number (five, for example) of users. Often the SaaS provider will offer a number of editions of their service at different prices, with varying functionality and levels of support – see Figure 5.3 for an example. You also pay for any additional data you store on the system in any given month that exceeds an initial data storage allowance. Now, I was careful to write ‘usually pay’ in the first sentence of this paragraph because you can gain limited access to some SaaS systems for free, which is great for small businesses who can get by very well with these systems until they hire more employees or accumulate a large amount of data – and then they can start paying. I have listed below three popular SaaS applications or application suites that were, at the time of writing, initially free of charge:

  • Dropbox ( affords online file storage (first 2GB free), file access and file sharing, automatic synchronization with PCs and laptops, and offline access to tagged files on an iPhone.
  • Google Apps ( provides e-mail, office applications, file storage, document sharing and online chat tools, and is free for up to 50 users.
  • Zoho ( offers a huge range of SaaS applications from e-mail to web conferencing tools that are initially free for a small number of users.

screenshot for Salesforce

Platform as a Service costs

Platform as a Service (PaaS) is a bit more complicated than Software as a Service, but it is often initially free for developers. For example, Google App Engine, at the time of writing, allows applications to use up to 6.5 CPU hours per day and transfer up to a gigabyte a day. Beyond these limits Google App Engine customers are charged for the following
services on a monthly basis (see for current prices):

  • outgoing bandwidth per gigabyte (GB);
  • incoming bandwidth per GB;
  • compute time per CPU hour;
  • stored data per GB;
  • number of e-mails sent.

The PaaS has a different pricing structure from Google, ranging from one free, and very limited, user
account to a monthly charge for a fully supported user (see Figure 5.4, and for current prices go to, and on a monthly basis they charge for:

  • number of users;
  • number of applications;
  • number of database objects;
  • storage (GB);
  • access to accounts and contacts databases in your CRM;
  • a level of technical support.

screenshot of Force

Infrastructure as a Service costs

Infrastructure as a Service (IaaS) price structures are far more complicated than SaaS or PaaS because of the range
of choices and the amount of control over the infrastructure given to the customer. For example, in Amazon Web
Services customers can be charged on a monthly usage basis for:

  • number of compute hours for a particular server specification, which could be small, medium or large, say, with a choice of Linux, Windows or other operating systems;
  • file storage per gigabyte and volume;
  • number of IP addresses;
  • GB of data transferred in and out of servers, storage, databases or message queues;
  • number of input and output requests for data transfer;
  • servers and processing power used in elastic load balancing;
  • GB of data stored in particular data centre locations for quick downloads in geographical regions;
  • number of server instances of a particular specification in a grid computing cluster and the number of hours used by that cluster;
  • a level of technical support;
  • import or export to physical storage devices per terabyte and device.

The Amazon Web Services (AWS) website provides an online calculator to help you estimate your monthly bill for each of the services they provide, along with examples of typical monthly prices for common use cases such as, for
example, a High Performance Computing (HPC) cluster or a marketing website. See Figure 5.5 for a screenshot of
the AWS calculator ( taken in January 2010. Other IaaS providers
provide similar tools, including Microsoft who go a step further with their ‘TCO and ROI Calculator’ for Windows Azure

AWS Simple Monthly Calculator


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