Outcome
By the end of this lesson, you will be able to read a cloud price in its own unit and turn it into a monthly cost.
| Prerequisites | I.2 |
| Time | 8 minutes |
1. Concept
A cloud price list looks frightening because every service is priced in a different unit. There are only four units worth knowing. Learn them and any price list becomes readable.
The four units
1. Per hour (time). Rented computers and many managed services are priced by the hour they exist and are switched on. Many providers actually count in seconds or minutes, but publish the price per hour. A month is about 730 hours.
2. Per GB-month (space). Storage is priced per gigabyte (GB) kept for one month. A gigabyte is a unit of data size: roughly a few hundred phone photos. “GB-month” means one gigabyte kept for one whole month. Keep 100 GB for a month and you pay for 100 GB-months. Keep it for half a month and you pay for 50.
3. Per GB moved (movement). Sending data is priced per gigabyte transferred. Which direction, and where it goes, decides whether you pay and how much. L3 covers this.
4. Per request (actions). Some services charge each time you ask them to do something: save a file, read a file, run a small piece of code. The price for one request is tiny, so it is usually published per thousand or per million requests.
Turning a unit price into a monthly cost
Every monthly cost is the same sum: unit price x how many units you used.
- A machine at $0.10 per hour, on for 730 hours: $0.10 x 730 = $73.
- Storage at $0.02 per GB-month, holding 500 GB: $0.02 x 500 = $10.
- Data out at $0.09 per GB, sending 200 GB: $0.09 x 200 = $18.
- Requests at $0.40 per million, making 50 million: $0.40 x 50 = $20.
All four prices are illustrative, chosen to make the arithmetic easy. Real prices vary by provider, region and service.
One service, several units
Many services are charged in more than one unit at once. A managed database, for example, can charge per hour for the machine underneath, per GB-month for the space it uses, and per GB-month again for backups. When a bill shows several lines for one thing, this is usually why.
On-demand and the cheaper alternatives
The prices on a public price list are on-demand prices: pay as you go, no promise, stop whenever you like. The published on-demand price is often called the rack rate. Providers also offer lower prices in exchange for something:
- Commitments. Promise to use a certain amount for one or three years and get a lower rate. AWS calls these Savings Plans and Reserved Instances, Google Cloud calls them committed use discounts, and Azure calls them reservations and savings plans.
- Spare capacity. Rent machines the provider is not using at a large discount, accepting that the provider can take them back at short notice. AWS and Azure call this spot; Google Cloud calls it spot or preemptible.
This track sticks to on-demand prices. Discounts get their own lessons in Cloud Cost Foundations.
2. Worked example
A small team runs one website. Here is its month, with illustrative prices:
| What | Unit price | Amount used | Cost |
|---|---|---|---|
| One machine | $0.10 per hour | 730 hours | $73.00 |
| Its disk | $0.08 per GB-month | 100 GB | $8.00 |
| Stored images | $0.02 per GB-month | 250 GB | $5.00 |
| Data sent to visitors | $0.09 per GB | 300 GB | $27.00 |
| Image requests | $0.40 per million | 25 million | $10.00 |
| Total | $123.00 |
Look at the structure, not the numbers. Five lines, four units, one sum per line. Every cloud bill, however long, is built from rows like these.
3. Hands-on (5 min: no account needed)
1. Open the Google Cloud Pricing Calculator: cloud.google.com/products/calculator2. Add "Cloud Storage". Enter 500 GB of storage and note the monthly cost.3. Add "Compute Engine". Choose any small machine, 730 hours a month, and note the cost.4. For each one, find the unit the calculator used: per GB-month, or per hour.5. Divide the monthly cost by the amount to get back to the unit price.If your division matches the unit price on the provider’s pricing page, you can read any price list from now on.
4. Knowledge check
Q1
What does “GB-month” mean?
A. One gigabyte of data sent in a month
B. One gigabyte kept in storage for one whole month
C. One month of machine time for each gigabyte of memory
D. The maximum storage allowed in a month
Show answer
Correct: B. A GB-month is one gigabyte stored for a month. Data sent is priced per GB moved, a different unit. C mixes up storage with machine size. D is not a unit of price.
Q2
Storage costs an illustrative $0.02 per GB-month. You keep 400 GB for the whole month. What is the cost?
A. $0.80
B. $80
C. $2
D. $8
Show answer
Correct: D. $0.02 x 400 = $8. Unit price times amount used.
Q3
What are on-demand prices?
A. Pay-as-you-go prices with no promise to keep using the service
B. Prices that apply only when a provider has spare machines
C. Discounted prices for promising to use a service for three years
D. Prices that change every minute based on demand
Show answer
Correct: A. On-demand means pay as you go and stop when you like. B describes spot capacity, and C describes commitments. Published on-demand prices do not change minute by minute.
5. Apply
When you see an unfamiliar cloud charge, find its unit first. Is it per hour, per GB-month, per GB moved or per request? Then ask the matching question: how long was it on, how much is stored, how much was sent, or how many times was it called? The unit tells you which question to ask.
Related lessons
Glossary terms touched
Rack rate · API request charge · Spot · Committed Use Discount