Cloud Business Models

There are 4 ways vendors make money from cloud computing:

• Consumption – pay-as-you-go model charging customers for what they use
• Freemium – free for most users, some hooks present to prod users into paying
• Tiered Pricing – various levels of pricing which vary based upon arbitrary gateways of usage and categories of support
• Perpetual License – legacy carry-over models from installed software, not very common in the cloud

Bessemer Ventures recently posted a whitepaper reviewing some of these models. As a side note: VC firms have recently begun to post more types of these thought leadership pieces, which are worth following.

What are your thoughts on cloud business models? Which business model does your startup use? Are there other models you have seen?

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