The Utility Business Model. Have you implemented it yet?

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Posted by viabandwidth, 03-10-2011, 07:36 AM
Hi Folks, I'm just curious at how many of you have implemented the utility based business model like AWS where you charge per hr based on resources. I actually predict this will converge with the monthly based billing business model. I'm thinking there are definitely purposes for charging rates either differently for day as opposed to nights depending on geographic location or even charging per day/week even. That's how I see it...I'm wondering if you think it will stay at the two models where billing can be either /hr basis, monthly or even yearly..or will yearly and other long term billing scenarios be a thing of the past? If you do charge per hr...what types of services do you implement this business model on. Regular hosting or some sort of specialized package offering? Steve
Posted by JasonD10, 03-10-2011, 12:55 PM
The 100% utility billing method has it's benefits, but it also has it's fair share of problems and it is not a one size fits all way of billing. As a provider it is more costly to have utility billing due to the lack of commitment on the customer side, but yet there is still some provisioning (data storage so it can be turned back on) and the need of available system and network resources provided by the host. Most hosting scenario's do not require large amounts of bursts and some level of commitment is going to result in a better price, and a better service for both the consumer and the provider. At the end of the day we're all (consumers and providers) looking for the best service, and the best value. Where I see things going is a partial utility method. Ie: purchasing a certain amount of resources as a base line, then a buffer for bursting. This method would suit over 99% of websites and provide the best value. For small hosting needs though shared environments still work fine and have always allowed a level of bursting. For enterprise hosting long term contracts will never go away. When a company is going to implement a large scale application and if a host is rolling out a VPDC with custom built dedicated servers for that customer, they should fully expect a term commitment just as business always has demanded. For very large companies such as Amazon, it's easier to adopt a mass scale utility method but even then their pricing is not all that competitive anyways, and then you figure the lack of support they provide and there are a lot of better options unless you are one of those 1% that need a very scalable, on-demand dynamic hosting environment and are willing to pay their prices and do not need the support.
Posted by viabandwidth, 03-10-2011, 01:11 PM
Ok, I see what you mean. you're looking at the possibility of a "hybrid" billing model coming into effect. That still could get complicated, but it does sound very viable. I would think that for bursting, you could still have multiple rates like, as I call it; the "telecom effect" whereby you have to pay different rates for overages based on times of day and whether or not it's a weekday and or weekend. Easiest billing method is always best of course, but we are still diverging in technology. Billing won't converge for probably another 2-3 years. We are in for a myriad of facsinating billing options 8-)
Posted by dotHostel, 03-10-2011, 07:40 PM
IMO new "hybrid" billing model = old overages billing model

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