This post was originally published on Info World
According to the surveys of enterprise cloud spending trends, 2022 was the year of shockingly high cloud bills. As a result, enterprises are implementing finops programs to control and manage cloud spending. They are also turning to the cloud providers and asking for discounts.
Providers are happy to offer discounts, but they want something in return—namely, a multiyear commitment that looks like a cell phone contract. Do these longer-term cloud commitments make sense for enterprises looking for cheaper cloud services? Or will they play out like many of our cell phone contracts that left us with an out-of-date phone and service that didn’t meet expectations?
Let’s look at the pros and cons of these contracts.
The pros of multiyear agreements
Cost savings and predictability. These are the major advantages. Multiyear agreements often come with significant cost savings and discounts compared to pay-as-you-go pricing models. This allows for better budgeting and financial planning, especially for businesses with stable workloads and long-term cloud usage requirements.
Better service-level agreements (SLAs). Organizations can negotiate higher service levels with a longer-term contract, ensuring consistent performance and responsiveness. Multiyear agreements typically offer enhanced SLAs that include more substantial uptime, availability, and support. This means more value for mission-critical applications and workloads
— Read the rest of this post, which was originally published on Info World.
