subscription-based pricing model

Contributor(s): Nicholas Rando
This definition is part of our Essential Guide: Optimize your public cloud cost management strategy

A subscription-based pricing model is a payment structure that allows a customer or organization to purchase or subscribe to a vendor's IT services for a specific period of time for a set price. Subscribers typically commit to the services on a monthly or annual basis. 

Subscription-based pricing is increasingly being used for cloud computing. In a subscription-based model, cloud customers typically pay upfront, prior to receiving access to cloud services. Prices are often based on the subscription's length and a longer subscription often translates to a lower cost. Unlike pay-per-use or consumption-based pricing, however, a subscription-based model can cause customers to overpay for services. 

Cloud customers that use significant resources can benefit from a subscription-based model, however if a customer only uses a small amount of computing resources, a subscription-based pricing model may not be ideal. Some cloud providers offer a subscription-based model that can adjust to reflect actual usage.

Subscription pricing terms are documented in the provider's service-level agreement (SLA).


This was last updated in February 2015

Continue Reading About subscription-based pricing model

Join the conversation

1 comment

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

It would be great to see some historical data on IT subscription models, perhaps in chart format on this page.


File Extensions and File Formats

Powered by: