What is a single-tenancy environment in cloud computing?
A single-tenancy environment, also known as dedicated hosting or a dedicated instance, refers to a situation where each user or tenant has their own dedicated infrastructure and resources, including servers, storage and network components. These resources aren’t shared with any other users, maximizing performance and control.
Related Definitions
Master Service Agreement (MSA)
What is a Master Service Agreement?
A Master Service Agreement (MSA) is a contract between two parties, in this case the software provider and the buyer, outlining the terms and conditions of the agreement. It will typically cover pricing, payment terms, service levels, intellectual property rights, confidentiality, liability, termination, and dispute resolution.
Unlike a service level agreement (SLA) which outlines the specific performance metrics and criteria for the delivery of a particular service, for example uptime guarantees and support response times, an MSA covers the broader terms of the business relationship.
Cloud Unit Economics
What is cloud unit economics?
By definition, cloud unit economics refers to the financial analysis and evaluation of both the costs and revenue associated with operating a cloud-based business.
In other words, it’s a way of looking at how much it costs to run your business on the cloud, as well as how much it brings in.
Pricing Benchmarks
What are pricing benchmarks?
In SaaS, price benchmarking often refers to the process of comparing the cost of software to that of an alternative provider. Using this insight, buyers may be able to leverage a more favorable counteroffer from their vendor of choice. The most effective approach to benchmarking prices and securing the best possible deal on any subscription, however, is to find out what other similar companies are actually paying for the software.
Spot Instances
What are spot instances?
As with any cloud service provider, AWS will have spare capacity available to support surges in customer demand. To offset the loss, AWS offers this excess EC2 capacity – in other words, spot instances – at a heavily discounted rate.
To benefit from these spot instances, users must bid on this unused EC2 capacity in their desired region. The capacity is then allocated to the highest bidder. While it can be a great way to reduce costs by as much as 90%, it is only suitable for workloads that can tolerate interruptions and don’t require continuous availability. This is because AWS will terminate the instance after a two-minute notification in the event that it needs to reclaim the resources, or because the spot price exceeds the bid price. In other words, when other customers are willing to pay more.
Price Uplifts
What are price uplifts?
In the context of SaaS, price uplifts refer to an increase in the price of a software subscription. While many software providers will implement price uplifts on an annual basis, typically at the point of renewal, others may review and amend their pricing more frequently, for example on a quarterly basis. It is recommended that buyers negotiate a price uplift cap during the initial contract negotiation stage, placing a limit on the maximum amount the subscription can be increased by within a specified time period.
Reduction Clause
What is a reduction clause?
A reduction clause refers to a provision in a software agreement that allows customers to reduce the number of licenses or users covered by their subscription during the term of an agreement. This provides customers with flexibility to adjust their plan to meet evolving business needs, while avoiding paying for licenses or users they no longer require or needing to terminate the contract. The specific terms and requirements of a reduction clause may vary depending on the SaaS provider and the subscription agreement, for example it may be subject to a minimum number of licenses or users.