Hello and welcome to this lecture regarding the price and model of the VMware, Cloud, and AWS Service.

The pricing structure for the service is relatively simple, and to a certain extent similar to that of AWS EC2 pricing, if you are familiar with that. There are two different pricing options, these being on-demand and reserved.

On-demand pricing allows you to pay for each host that you provision within your cluster. There are no upfront costs and no long term contracts that you are fixed by. You simply pay for the host by the hour for each hour that it is operational within your SDDC.

Reserved pricing is slightly different; however, it does offer you up to a 50% discount when compared to that of on-demand pricing. With reserved pricing you reserve the physical hosts for either a single year or across a three-year time period. The longer the reservation period the greater the discount offered. You are also required to pay for the term up front, regardless of if you used the host or not. You will still be required to pay for the reservation term.

This table shows the cost savings to be made between on-demand and reserved purchasing. Included in this cost is the host, the VMware software, and the underlying AWS infrastructure and maintenance.

So, when would you used reserved over on-demand? You would typically use reserved pricing when you have a known and consistence requirement for computing storage.

For example, you might be hosting a number of applications, and web infrastructural in your SDDC, or costing numerous VMs. And based on trend data and current requirements, you're now at a minimum, you will need to have at least two hosts at all times to handle and manage the workloads. You could, therefore, reserve two hosts over a three year period, which could save you over $221,000 when compared with on-demand hosts for the same period.

Let's break this down, so you can see how this is worked out. For on-demand pricing for two hosts over 3 years. There is an hourly price of just over $8. If you then multiply this by the number of hours in the year, which is 8,760, this will cost you just over $73,000 a year. If you then multiply this figure by three for 3years, then this will cost you almost $220,000.

Now, if you multiply that figure by two for 2 hosts, it will cost you just under $440,000. So, that's for 2 hosts, over 3 years, for on-demand pricing.

Now, let's see how this compares against reserved pricing. So, again for two hosts over three years. Per host it costs you just over 109,000 to reserve it across three years.

Multiply this by two for 2 hosts, and the end result is just a little under $219,000. So, the total savings between the two is $221,095.

As you can see, there is a considerable saving to be had when you specify reserved pricing. You can then use on-demand hosts when you need to temporarily scale out your cluster to coat with fluctuation in demand, before then remove from the on-demand hosts when traffic subsides.

These prices may vary depending on a few different factors. As new agents become available, the pricing may vary from region to region. The pricing discussed here all relates to the Oregon region fewer SDDC. Also, this is not taken into account any normal discounts you may be entitled to with VMware.

Depending on your existing VMware licenses that you own on premises, the VMware Hybrid Loyalty Program could add another 25% discount on any one of three years reserves hosting your account.

The eligible products and licenses that you need to own on premise will provide the following discounts with a maximum of 25% provided per host. From a management perspective, there is nothing that you need to do to apply for this discount. It will automatically be applied to your account as long as you maintain your Support and Subscription service.

For every 2 CPU licenses you hold on premises, within the above table, will provide discount for one 2 CPU host within VMware, Cloud, and AWS. And if you aren't an existing customer of VMware, and you are a part of VMware purchasing programs, then you can redeem any HPP, which is Hybrid Purchasing Program, or SPP, Subscription Purchasing Program credits that you all ready have against the cost of either on-demand or reserved host that you select.

Now, I've discussed the costs for the hosts themselves, there are other costs that you should be aware of. These being transfer costs and Elastic IP address charges. VMware have defined the following classifications of data transfer with their associated costs. Now, these prices are again likely to fluctuate over time, and will again vary between regions, as more and more regions become available.

However, I just wanted to bring this to your attention, that data transfer costs can often be overlooked, but it is something that needs to be taken into consideration when designing your SDDCs going forward. The charges for EIPs are as follows, so essentially, if you have an EIP, whether it's attached to a VM or not, you will still be charged.

This is different to the pricing for EIPs within a standard AWS account, where you are only charged for an EIP in your account if it is not associated to an instance.

That brings me to the end of this lecture where our focused on the pricing and the service. Coming up next, I want to review the key points taken from this course within a final summary lecture.