Cloud Economics
The money side of cloud: the cost-model shift, licensing, and cost attribution.
| Term | What it means | Key distinction |
|---|---|---|
| fixed costs | Up-front CapEx, sized for peak | Paid regardless of use |
| variable costs | Pay-as-you-go OpEx | Tracks actual consumption |
| on-premises | You own the whole stack | Carries the fixed costs |
| Right-sizing | Match resources to real usage | Highest-impact cost lever |
| Bring Your Own License | Use licenses you already own | vs license-included pricing |
| consolidated billing | One bill across accounts | Pools discounts, doesn’t merge accounts |
| cost allocation tags | Attribute spend by tag | Not retroactive — activate early |
- Fixed vs variable costs (CapEx vs OpEx) is the core economic shift of moving to cloud.
- Rightsize before committing to Reserved Instances or Savings Plans.