Transaction Level Economics of Cloud Applications

Cloud computing provides many benefits to users including the elimination of up front infrastructure investment plus lower overall infrastructure costs due to increased resource usage efficiency. Cloud applications can also make use of outside services on demand. Since cloud computing operates on a pay-as-you-go model, application developers must understand the economics of their software in finer detail. They must understand how much their software costs to run and how much revenue they earn as their software runs. This understanding comes from knowing how the application uses infrastructure and services for which costs accumulate. We explore some fundamental concepts of cloud application economics at the transaction level.