Cloud Computing by the Hour

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picture-4Earlier last month web hosting provider SoftLayer announced the availability of cloud services on an hourly basis. The offering includes flat hourly rates for cloud instances, while cloud storage is accessible on a pay-as-you-go basis.

While most traditional cloud services (IBM, Savvis, AT&T, Terremark, etc) require multi-year commitments, the hosting industry has seemed to embrace commitments on a monthly basis. However, as cloud services have matured and the Web 2.0 audience has grown, the need for more flexible service offerings has become apparent. SoftLayer claims that demand from services over the Web has matched the demand and revenue generated from IT customers, and with the growing Web customer base comes a growing demand for flexibility. Web customers must be able to account for dwindling budgets and sudden surges in traffic, and often need the freedom to build out a service as the user base grows.

SoftLayer looks to cater to these specific needs with its most recent offering, but is only partaking in a rising tide of interest towards more flexible cloud service offerings. Amazon pioneered the idea of hourly billing earlier this year, and RackSpace currently offers a similar deal. Other players, like GoGrid, offer a “tolltag” model in which users are required to prepay a specified amount, and then hourly billings are deducted from the total on a monthly basis. Larger players like AT&T and Savvis advertise hourly service packages, but usually leave mention of monthly commitments and minimum billing floors to the fine print.

In short, as cloud services have matured, companies have begun seeking a competitive advantage in the flexibility of their service offerings. As the trend continues, it will become more and more possible for IT departments to scale at fixed cost.

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