Cloud Computing

Presented by
Iqra Arif 17200856-004
Cost Metrics and Pricing Models

• Business Cost Metrics

• Cloud Usage Cost Metrics
 Cost Metrics and Pricing Models
• Today's lectures was based on cost analysis and different types cost of metrics that
businesses can consider before adopting cloud-based or on-premise IT resources
and investments.
• Compares different cost models for providing an on-premise IT services and
a cloud-based IT resources.
• Business and organization are keen in reducing operational cost by optimizing IT
environment, developing IS strategies that are utility-centric (UC) and pay-per-
usage models avoid up-front infrastructure investments.
Business Cost Metrics

• Metrics used to evaluate the estimated costs and business value of leasing cloud-
based IT resources when compared to the purchase of on-premise IT resources
• Up-front costs: Initial investments that organizations need to make in order to
fund the IT resources they intend to use.
• Includes costs of obtaining, deploying, and administering these IT resources.
• Include Up-front cost for purchase(H) e,g Hardware and leasing(L) e.g labor cost.
• On-going costs: Expenses required by an organization to run and
maintain IT resources it uses.
• Include on-going costs for operation of on-premise e.g insurance and
cloud-based IT resources e.g virtual hardware leasing fees.
• Server Usage- The allocation of virtual server and resource
reservations
Additional Costs

• To supplement and extend a financial analysis beyond the calculation and

comparison of standard up-front and on-going business cost metrics
• Cost of Capital – Cost incurred by raising required funds.
• Sunk Costs The prior investment that has been made in these on-premise IT
resources is referred to as sunk costs.
• Integration Costs funds to carry out system integration etc
• Locked-in Costs Cost related to movement of consumers between cloud providers