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Cloud Cost Model Education for Customers – What MSPs Need to Know

Creating and evaluating cloud cost models is a potentially complicated process. Here, MSPs (managed service providers) help customers wade through the fine print, choosing the right option for their situation.


General scenarios include migrating to the cloud, re-evaluating current cloud subscriptions, and understanding the monthly cloud bill. Since most customers are used to the on-premises (on-prem) cost model, this involves a substantial mind shift. In this article, we unpack the three most important factors to keep in mind when guiding your customers in this process.

1. OpEx vs. CapEx

When servers are on-premises, the significant expense is CapEx (Capital Expenditure) related. On the other hand, when a business migrates to the cloud, this cost shifts to OpEx (Operational Expenditure). To the uninitiated, this sudden increase in running costs might seem counterproductive, hence the need for training your team and shifting the mindset. When you prepare your client for the decrease in CapEx and resultant increase in OpEx, this shift is smoother and more comfortable for the entire team.


Teams must learn that there is a direct correlation between hours that an instance is running and the monthly bill. Idle instances must be switched off to eliminate unnecessary cost. CloudSnooze is your partner in reducing this type of waste and adding value to your customers.

2. Understanding the Cloud Bill

On-premises servers generally run around the clock with no report on the actual usage. Here, database servers and web servers, for instance, have different specifications, but the initial, upfront cost of the hardware would be similar. Cloud services usually don't have upfront costs.

Different types of cloud instances are priced differently. You pay for the actual time that a resource is "on," but also for the kind of resources. Database and web servers are priced differently and would thus be separate items on your monthly bill. As a result, the statement appears complex, but once understood, this creates an opportunity for resource optimization and cost allocation.

3. IT Cost Authority

With the shift to cloud computing, a significant mental change is also necessary. Gone are the days of CapEx cost models for computing. If you adequately prepare your customers for this new model, helping them understand the options, costs, and projected usage, the bill at the end of the month will not come as a surprise.


This shift also increases the need for managed service providers, specifically for cloud cost optimization. Keeping up with the latest cost structures and other options available from the public cloud service providers will keep you at the front of the pack.

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