Cloud Computing
On-Demand
Definition
On-demand is a pricing model for cloud services where customers pay for the resources they use, typically on an hourly or per-second basis, with no long-term commitments or upfront costs.
Why It Matters
The on-demand model is a key financial benefit of the cloud. It allows startups and developers to access powerful computing resources with just a credit card, without the need for large capital expenditures. It also allows for flexibility, as resources can be shut down when not in use.
Contextual Example
A developer needs a server for a few hours to run a test. They can spin up an On-Demand EC2 instance on AWS, run their test, and then terminate the instance, paying only for the time it was running.
Common Misunderstandings
- On-demand is the most flexible pricing model, but it is also the most expensive on an hourly basis.
- For predictable workloads, Reserved Instances or Savings Plans offer significant discounts compared to on-demand pricing.