Chapter 4

Consumption-Based Model

What is a Consumption-Based Model?

The consumption-based model is a pricing model used in cloud services where customers are only charged based on their actual resource usage.

Characteristics of the Consumption-Based Model:

• No Associated Upfront Cost: Customers do not need to pay any upfront fees; costs are only incurred as resources are used.

• No Wasted Resources:

• No charges are incurred for unused resources. However, "unused" can vary depending on the service:

  • Blob Storage: Storing any data consumes storage space, so it is considered to be in use.
  • Virtual Machines: Running VMs consume CPU, memory, and other resources, even if there isn't any traffic, so they are also considered in use and will incur charges.

• Pay for What You Need: You are only charged for the resources you actively use.

• Stop Paying When You Don’t: Charges stop when you no longer use the resources.

Visual Representation: