AWS offers you the opportunity to pay cloud bills before they’ve been issued Amazon Web Services has started allowing its customers to pay in advance. As the name implies, a facility called “Advanced Pay” will let you send money to Jeff Bezos before your bill for cloud services has been issued. “Once you add funds to Advance Pay, AWS will automatically use them to pay for your invoices when they become …
This sounds like an old cellphone or cable Internet contract. You pay a ton of money in advance and then hope you get your product. If you don't get your product, the fine print will explain how that's exactly your fault and how you're now in debt for violation of the contract.
An initial search found this interesting thread going back a over a decade.
Ed: I like the follow-ups... being from the future, this just reminds me how little we matter to companies like Amazon even back in 2010 when we communicate through their forums.
There's more here once I refined the search further.
Looks like a combo of people who have to pay per transaction fee(s) and people where its easier for them to authorize $1K for cloud services in one go versus $80 one month, $120 the next, $90 the following and so on and so forth but don't want to commit to their annual offerings.
It's the best of both worlds for Amazon, per second rates AND money up front.
One regular gripe AWS has been dealing with for years has been the fact that there's no foolproof way to stop sandbox/dev accounts from accidentally running up massive bills. I wonder/hope if this is the first step towards accounts where you don't have to attach a credit card, and when your balance hits zero, your services switch off and your costs stop rising...
Would mean they could potentially do away with the Free Tier, reduce the pricing of the lowest tier of each service to compensate, and credit new accounts with $200, or something like that.
Fingers crossed...
I figured that was the main reason anyone would use this, as a way to safely dispose of any surplus operating budget so the beancounters don't try to claw it back at the end of the year. And if they still complain then the scorn can be easily shunted up the ladder because hey, it was the boss/department manager/board members who were always banging on about how putting everything in the cloud would save us so much money, wasn't it?
It's a complex calculation. If you outsource, that fee is an expense for taxes. If you buy a load of servers, drives and other hardware, you have to depreciate it over several years. This can mean gear that's out of service due to age but still having to be depreciated. You also have to take on staff to operate it and comply with all of the laws that entails. Some locations penalize employers if they take on extra staff and then lay them off when the work is done. Other places a person is nearly guaranteed perpetual employment after a certain period of time if they aren't embezzling from the company and aren't killing anybody on the board. Doing a co-worker might be ok in terms of continued employment.
I'm not a fan of outsourcing. It's risky and if the business can't fund all of the tools it needs to operate, there is a question of whether it's really viable or not. I had a manufacturing company for years and we went through the analysis on all of the things we thought we might send out. It wasn't just a financial decision either. Certain processes were key to our product's quality and not easy to inspect from an outside supplier. If they substituted the high temperature solder we used for the common alloy stuff, we'd be hip deep in returned product and take a massive reputation hit. It was rather pointless as that step was something done daily. If we couldn't hire people to do the work at a wage we could afford, how could another company at a price that makes them competitive including their profit margin? When you have an investor that comes from the business world, you have to work extra hard to get them doing correct analysis.
One thing that always gets me is depreciation (seriously, I don't get it).
In my feeble mind, whether your organization is responsible for depreciation or the organization that you're leasing stuff from (anything from cars to servers to heavy equipment), someone is on the hook for that, right?
If so, at the end of the day, the end user of the whatchamacallit is paying for that depreciation, either directly or indirectly. The only difference is the side of the ledge it falls on, I guess.
I'll say it again, nobody ever saves money moving to the cloud, and now they want your money in advance! Cloud services are convenient for a very good reason, and act like a revenue waterfall for the providers. The cloud would even exist if these mega-corps weren't making money hand over fist, and the bonus is, they get your data at the same time, which for many, locks you in, so you keep paying - forever!!
I run a saas business and many of my customers have requested a pay in advance option because they don’t want automatic recurring charges, and they don’t want to lose service with missed payments. Also recurring payments are not that reliable, and many people don’t want to worry that they’ve missed payments while going on vacation or not watching things that closely. They won’t lose service that quickly with a missed payment but the idea does bother some. They’re not the majority but these people do exist, especially SMBs in developing countries where they’re not always in love with automatic recurring charges.
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