Why Should Hosted Service Providers Consider Pay-As-You-Go Models?

 


"Pay-as-you-go." The term, which originated in the US between 1830 and 1840, is the most popular payment model in the present time.


Many businesses, especially small and medium ones, prefer this model due to its several benefits. For starters, they pay only that amount based on a product or service they consume or use (usage-based pricing). By doing that they can meet customer demand and remain innovative.


In the era of cloud computing, this pricing model is perfect for Hosted Service Providers (HSPs) and Cloud Service Providers of all sizes and types. Because they will only pay for actual resource consumption.


Here are some reasons why the pay as you go pricing model is best for HSPs and CSPs:

1. Cost Efficiency


Traditional pricing models (such as flat rate pricing) HSPs are at risk of paying for unused services. However, the pay as you go pricing model (alternatively, payg model or usage-based pricing model) eliminates that.


By using the pay as you go model, cloud providers are assured of paying only for the actual consumption of services and resources. This could translate into massive cost savings for them.

2. Scalability and Flexibility


This is another major advantage of the pay as you go model. HSPs and service providers can easily scale resources as per their actual usage. Be it data transfer or storage space, the pay as you go model gives immense scalability and flexibility.


Payg model is perfect for HSPs and Cloud Service Providers that need to scale resources not only upwards but also downwards. It is also perfect for businesses with fluctuating usage levels.

3. Predetermined and Transparent Billing


By using the pay as you go model, HSPs and service providers can be assured of a predetermined, predictable, and transparent billing. This takes off a huge burden on HSPs and CSPs about complex billing during varying usage patterns.


When cloud providers handle their monthly fee easily, they know their actual resource consumption as well as billing systems. This not only reduces billing errors but also increases efficiency by leaps and bounds.

4. Better Cost Control and Infrastructure Management


This one is quite obvious! As pay as you go model ensures cost efficiency as well as predetermined pricing, it leads to better cost control and infrastructure management. When HSPs and Cloud Service Providers leverage payg model, they are better equipped at controlling costs and tracking usage.


By opting for payg usage-based model, HSPs and cloud providers can efficiently allocate resources based on real-time needs. Not just that, they get to enjoy cost control and effective infrastructure management without any manual intervention. The solution providers do all the heavy-lifting.

5. Enhanced Revenue Potential


There are two main ways to make money: save it (after all, a penny saved is a penny earned!) or make more of it. Payg model helps HSPs and Cloud Service Providers in both aspects! However, the model is much more than that!


Not only cost control or cost efficiency, the pay as you go model enables users to earn decent revenue from the services they offer. The return on investment on payg model is quite high compared to other pricing models as well.

All In All,


The above five benefits are just the tip of the iceberg. There are many benefits of the pay as you go (or payg model, in short) especially for Hosted Service Providers, Cloud Service Providers, and their customers alike.


If you are an HSP or any professional service provider, you may want to consider the payg model. It would be prudent to contact some reliable and reputable solutions providers and understand their pay as you go pricing plans. That would help you make an informed decision.









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