The cloud is a utility service and, similar to a utility like electricity, you pay for it based on your hourly usage. The major advantage of the cloud’s utility pricing is that costs scale up and down along with your configuration, allowing you to plan for the traffic of your visitors without waste or excess. But rather than talking directly about dollars and cents, let’s use an analogy of hosting a dinner party to understand the power of utility pricing.
A successful dinner party needs two things: food and seating. In our first scenario, you are hosting this dinner party at your home. Because you are responsible for purchasing enough food and having enough seats on hand, you’re going to have to make some important decisions and purchases well in advance. To do this, you’ll have to estimate to the best of your ability.
One forecasting strategy is to rely on RSVPs. Using that data, you are able to determine an approximate amount of guests attending your party, which can help determine the amount of resources needed (food and chairs) for a successful evening.
While this strategy would work in a perfect world, I have found it to be unreliable. I often have to plan for excess, having extra chairs and food for the attendees. This results in waste because I have cooked extra food for my party. However, the opposite could happen; I could have an influx of guests who didn’t RSVP and I could not have enough seating or dinner. This scenario is analogous to dedicated hosting in the sense that you have to use a lot of estimation to plan for the traffic to your server. Conversely, if you don’t have a lot of “guests” show up, you could have spent an excess of money on your hosting solution by having all that gear up.
For our second scenario, let’s look at hosting your dinner party at a restaurant; this is analogous to cloud hosting. While you would still want to get guests to RSVP to get a general idea of the attendance, having an exact number isn’t as crucial. There is a fully staffed kitchen that can cook to order for the partygoers, so you don’t have to worry about how much food is needed. Furthermore, instead of serving an average amount of food, guests are able to order different plates and quantities of food directly off the menu, satisfying their exact appetite.
Not only can the restaurant’s kitchen produce food for extra guests, the same goes with ensuring that they have a place to sit as the restaurant has many chairs. This on-demand support of the restaurant is equivalent to the resources of the cloud that can be deployed at a moment’s notice to handle the exact traffic to your site. This is one of the true powers of the cloud – the ability to scale for your given level of Internet traffic, while ensuring that you pay just for the resources needed to serve up that traffic.