IBM embraces ‘pay as you go’ cloud pricing

The overhaul means businesses can benefit from more flexibility when striking agreements

IBM has ditched subscription-based cloud pricing in favour of a 'pay as you go' scheme as it continues to transform its central focus to cloud provision.

With the Cloud Pay as you Go with Committed Use model, customers will need to negotiate a certain amount of cloud usage they’d be committing to pay for month after month, as well as discounted pricing. 

IBM's main selling point for its new cloud pricing model is that customers won't be met with penalties for using more than is expected. Instead, customers will be charged at the normal discounted rate they’ve negotiated for their expected cloud usage.

"With this billing model, you commit to spend a certain amount on IBM Cloud and you also receive discounts across the Cloud platform,” said Amit Patel, offering management, direct sales and Haley Lucey, IBM cloud content experience.

"You are billed monthly based on your usage, and unlike a subscription, you continue to receive a discount even after you reach your yearly committed amount."

The change comes after another mixed round of financial results for the computing giant, with a 10% surge in cloud growth overshadowed by the sharpest overall revenue decline in five years. 

Related Resource

Where next for business?

Sample our exclusive Business Briefing content

What will business look like in 2021Download now

IBM's cloud business earned $7.5 billion during Q4, with revenue from Red Hat also increasing by 19%. However, this wasn't enough to raise overall revenues, which dropped 6% between October and December. 

The pivot to pay as you go pricing is also part of a wider shift in pricing strategy, with IBM also announcing last week that it’s raised the prices of its Enterprise Plan for Db2 on Cloud programme from January 2021. 

The console user experience is also getting an overhaul, IBM says, with changes including visualisation of progress towards a cloud commitment, with ways to identify any discount, spending progress and remaining time on a commitment. 

Customers can also look at their spending break down, month by month, as well as a detailed usage dashboard for each specific calendar month.

Featured Resources

BCDR buyer's guide for MSPs

How to choose a business continuity and disaster recovery solution

Download now

The definitive guide to IT security

Protecting your MSP and your customers

Download now

Cost of a data breach report 2020

Find out what factors help mitigate breach costs

Download now

The complete guide to changing your phone system provider

Optimise your phone system for better business results

Download now

Recommended

IBM launches suite of hybrid cloud storage services
hybrid cloud

IBM launches suite of hybrid cloud storage services

27 Apr 2021
IBM, Red Hat and Cobuilder reconnect fragmented supply chains
supply chain management (SCM)

IBM, Red Hat and Cobuilder reconnect fragmented supply chains

14 Apr 2021
IBM's infrastructure services spin-off to be named Kyndryl
Business operations

IBM's infrastructure services spin-off to be named Kyndryl

13 Apr 2021
IBM’s public cloud for banking is now generally available
public cloud

IBM’s public cloud for banking is now generally available

7 Apr 2021

Most Popular

KPMG offers staff 'four-day fortnight' in hybrid work plans
flexible working

KPMG offers staff 'four-day fortnight' in hybrid work plans

6 May 2021
Dell patches vulnerability affecting hundreds of computer models worldwide
cyber security

Dell patches vulnerability affecting hundreds of computer models worldwide

5 May 2021
16 ways to speed up your laptop
Laptops

16 ways to speed up your laptop

29 Apr 2021