Amazon DevPay Introduces Tiered Usage-Based Pricing

Amazon DevPay now has a new and very powerful feature: tiered pricing for all usage-based components of a product's price.

Using this new feature, you have more flexibility when you create the pricing plan for your product. Specifically, you can now create multiple levels, or tiers. You can create any number of tiers within your pricing plan. Pricing for each tier is based on the usage incurred by each of your customers.

Let's take a look at some of the models that you can create:

First, you can create a free usage level to make it easy for customers to give your product a try. You would set the sign-up fee and the monthly fee to zero, and then create a set of tiers. If you have a storage-based product, you could allow them to use Amazon S3 to store up to 2 GB / month for free, with a charge of $1 for each GB / month beyond that. As the business owner you would be responsible for the entire cost of S3, so you'd wan to make sure that you are providing sufficient value to ensure that your users grow from the free tier to the paid tier.

Second, you can create a model which is similar to the typical cell phone pricing plan. In this case you would charge a sign-up fee and a monthly fee, and would then include a certain amount of free usage as part of the first tier, with additional (and more costly) tiers after that. Again, with a storage-based product, you could charge $5 to get started, $5 per month for usage, and then allow up to 10 GB / month at no additional charge.

It is important to note that Amazon DevPay handles all of the nitty-gritty details associated with creating, changing, and billing your customers. You don't have to deal with partial month subscriptions, boundary conditions, or the complexities involved in changes to the prices for each tier or even to the number of tiers. You can read all about this in the documentation.

A number of our customers are already using DevPay in creative ways:

• DreamFactory is using DevPay to provide access to the DreamFactory Suite. We've also got a success story for them.
• Zmanda uses DevPay as part of the Amanda backup tool, again we've got a success story for them.
• Wowza Media Server Pro looks pretty cool -- media processing charged by the hour and the gigabyte, implemented using Amazon EC2 and S3.
• Red Hat Enterprise Linux is available on EC2 using DevPay.
• SmugMug's SmugVault? You guessed it, also built using DevPay, running on EC2 and S3.

If you are using DevPay in an interesting way, please feel free to let us know via email to evangelists@amazon.com or by leaving a comment.

-- Jeff;