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Cloud Computing · Foundational

Consumption-Based Pricing

Pricing model where customers pay only for the cloud resources they actually use, also called pay-as-you-go.

Definition

Consumption-based (pay-as-you-go) pricing charges by measured units such as instance-seconds, GB-months stored, requests or data transferred, with no long-term commitment. It enables experimentation and elasticity but can make costs less predictable, which commitment discounts and budgets help address.

Example

A Lambda function is billed per request and per GB-second of execution, so a month with no traffic costs almost nothing.

Exam tip

Pay-as-you-go offers flexibility; reserved or committed pricing trades flexibility for discounts of up to roughly 70 percent or more.

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