The next step is to decide the type of payment method, on-demand or a term commitment which is generally one or three years.
For example, committing funds up front for services that will be utilized over the term commitment versus on-demand, where organizations are billed on a monthly basis. Deciding on which payment method will largely depend on how well an organization can forecast its multi-year spend as well as the capability for large up-front investments.
Term Commitments can reduce service costs by up to 50%. Host term commitments are applicable to VMware Cloud based SDDC offerings. Other VMware Cloud services may also be eligible, for example VMware Cloud Disaster Recovery. It is common for organizations to use a combination of hosts term commitments as well as on-demand. Determining the resource requirements for term committed hosts requires both technical and business data to be analyzed.
Note: Paying up-front is generally required for EAs to maximize discounting. To determine the best option for your organization, please contact VMware's Cloud Economics team. Additional resources can be found in the VMware’s Cloud Economics team’s eBook .
It is important to recognize the benefits and risks of both payment methods. Host term commitments are optimal for long-lived (9+ months) workloads. On-demand host capacity can benefit workloads that are time-bounded with resource utilization spikes, such as end-of-year or end-of-quarter activities or event-based usage such as seasonal demands.
VMware Cloud Sizer with LiveOptics data provides an excellent snapshot of an organization’s current data, while vRealize Operations Cloud 'sCapacity Analytics can be used to help forecast growth.
