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How Do Cloud Providers Decide How Much to Charge?

When you are planning to get a quote from your cloud services provider as to how much money they will charge you, it is necessary to understand how they set the rates for their services. The key cost factors which decide cloud hosting prices are storage, networking and computing.

- The storage costs are very similar to computing costs and here the vendor calculates the amount needed to operate the storage hardware or get new hardware for your storage requirements.

- When calculating the prices charged by cloud vendors, you must realize that the vendor will also decide how much they have to spend to maintain the network. So, the vendor will estimate the costs for the hardware, network set-ups, labor and maintenance. For instance, every virtual server will demand some specific kind of hardware which the provider has to purchase. The infrastructure maintenance related to costs for security tools like firewalls, patch panels, routing, uplinks, load balancers, LAN switching etc which are needed to make sure that the architecture runs smoothly. Labor costs refer to expenses needed to monitor, manage and maintain the infrastructure and staff so that they can guarantee 24x7 up-time.

- Computing costs refers to costs calculated by providers for their CPUs. Every business will have distinct requirements concerning the usage of CPU. So, the vendor will consider the total virtual memory or RAM used in public clouds and divides this into costs for every rack unit of the hardware. Costs will include licensing fees depending on the OS you use. The provider will calculate the costs for acquiring hardware for every GB of the virtual RAM that you use.

Factors to consider while deciding for cloud hosting costs 

How are costs generally charged for cloud resources? It is not that important. The important thing is what else we have to consider once we are coming up with the cloud budgeting. Then only one can get the real answer to how to price cloud services. Here are those factors to include-

a.             a. .Components to migrate- Its not necessary to migrate each and every component of your company when the website is going through cloud migration. Some components can be kept for the on-premises itself. This will help you to save a lot of money. But for this, you need to be clear with your Cloud provider costs. For this one can also think of maintaining a fixed hybrid infrastructure. Such an infrastructure will be comprised of both on-premises and cloud-based functions. 

           b. Changes required while deployment- Sometimes when an enterprise migrates to a cloud it demands a lot of changes. Many times some of the software is outdated or is not supported by your cloud hosting provider. It is suggested to identify such challenges before setting up cloud computing charges. Third-party support- As migrating over the cloud does not seem like an easy task, it sometimes also calls for support from a third-party support system. Such third party consultants charges can be hefty and will shoot up your budget. 

           c. Safe data integration and migration- Data is the most crucial asset for any organization. When the data is integrated over the cloud, it has to be checked twice. A single threat to the data can completely ruin it forever. Getting back the same amount of data in its true form can lead to a lot of expenditure.

CloudOYE is a leading cloud storage solutions on Cloud Server Hosting & Dedicated Servers Hosting. Call our technical experts at 1800 212 2022 or mail us at

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