IDG Contributor Network: If you don’t make a reservation, you’re going to need to tip the maître d’

The pricing models for compute resources in the cloud can be complicated. Some (but not all) variations include the following:

  • On-demand instances
  • Reserved/prepaid capacity
  • Spot instances
  • Dedicated instances

On-demand pricing is pretty straightforward: for every hour that a compute resource runs you pay a certain hourly cost. Reserved pricing allows you to significantly reduce your hourly cost by committing, and prepaying, to run a compute resource for an agreed period of time. Spot pricing allows you to establish a maximum bid price for a compute resource and, if there is a resource available at or below that cost, you pay the current spot price. And dedicated instances cost the most, but give you dedicated hardware on which to run your application.

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from InfoWorld Cloud Computing