Cloud cost glossary

On-demand pricing

On-demand pricing charges for compute by the second or hour with no commitment, at the highest per-unit rate — the default and most flexible way to pay for cloud resources.

On-demand is the baseline every other pricing model discounts against. You pay the list rate for exactly what you use and can start or stop at any time, which makes it right for spiky, short-lived, or unpredictable workloads and for initial testing.

For steady baseline usage, on-demand is the most expensive option — reserved instances, Savings Plans, and committed use discounts exist precisely to lower it.

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Part of the SpendArk cloud cost & FinOps glossary.