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

The ultimate law enforcement agency guide to going mobile

Best practices for implementing a mobile device program

Free download

The business value of Red Hat OpenShift

Platform cost savings, ROI, and the challenges and opportunities of Red Hat OpenShift

Free download

Managing security and risk across the IT supply chain: A practical approach

Best practices for IT supply chain security

Free download

Digital remote monitoring and dispatch services’ impact on edge computing and data centres

Seven trends redefining remote monitoring and field service dispatch service requirements

Free download

Recommended

IBM pledges to reskill 30 million people globally by 2030
Careers & training

IBM pledges to reskill 30 million people globally by 2030

13 Oct 2021
Telefónica taps IBM to deploy its first-ever 5G core network
5G

Telefónica taps IBM to deploy its first-ever 5G core network

23 Sep 2021
IBM signs CaixaBank in cloud services deal
cloud computing

IBM signs CaixaBank in cloud services deal

15 Sep 2021
IBM adds new features to Watson Assistant
artificial intelligence (AI)

IBM adds new features to Watson Assistant

9 Sep 2021

Most Popular

Best Linux distros 2021
operating systems

Best Linux distros 2021

11 Oct 2021
Apple MacBook Pro 15in vs Dell XPS 15: Clash of the titans
Laptops

Apple MacBook Pro 15in vs Dell XPS 15: Clash of the titans

11 Oct 2021
HPE wins networking contract with Birmingham 2022 Commonwealth Games
Network & Internet

HPE wins networking contract with Birmingham 2022 Commonwealth Games

15 Oct 2021