There is probably an inclination to overspend, but that is if one is not disciplined. For instance when the cell phone minutes are metered, people are careful about using them. They watch how many they use and if it is necessary.

The Cloud elasticity is needed when it is difficult to predict what the demand will be. Demand is function of many things – but primarily price. Again the cell phone plans make perfect sense, where there are price tiers.

So it is possible to control spending if the demand is predictable. Amazon’s new computing power reservation scheme is a step in the right direction to address this very concern.

Ranjit Nayak

A Unified Approach to Performance Management and Cost Management for Cloud Computing – An activity-based costing solution that assigns costs to applications, services and components based on resource consumption.
http://www.jinspired.com/products/jxinsight/meteringthecloud.html

ABC for Cloud Computing
http://williamlouth.wordpress.com/2009/01/27/abc-for-cloud-computing/

William

Excellent analysis. We have spent some time trying to analyze the potential for just this type of problem. The Amazon model for EC2 seemed a bit misleading to us, as the unit price is so small and most consumers don’t bother to do the extended calculations. As such, we’re trying to be cognizant of user behavior patterns in our service, and to develop ways to notify customers when we think they may be unwittingly spending resources (idle time notifications, detailed usage reporting, etc.). Of course, we don’t want to be intrusive, so companies who choose to provide “cloud” or SaaS services, like ours, need to walk a fine line between reporting and nagging. Analyses like yours really help us understand this new world and how we can best serve the customer in it. Thanks very much.