Time and time again I come across a business model based on Pay as you go (PAYG), which I don’t like.
I can see it being useful in some industries like mobile, with its low buy in cost and cost visibility. Though that usually comes at a cost. For example mobile calls on PAYG are more expensive than being on a contract plan. However PAYG is really convenient as you don’t have to go through credit checks, direct debits etc. to setup an account. Perfect if you are a teenager.
Admittedly there are some other good features of PAYG in the mobile industry, like showing roughly how much a mobile phone device actually costs. With mobile contracts in the UK the phone is often bundled into the contract. So “cost visibility”, knowing how much you are paying for the mobile device and the calls can be really difficult to know.
Anyway, last week I was chatting to a someone who was offering a PAYG hosting service framework. For example, he claims with his system is cost just 60-something pence yesterday to run his Website.
Ok, that might get some managers wet, but I do not want to pay extra if I out gun typical limits.
The fact is I am a power user. I smash typical bandwidth limits for breakfast. I upload, I serve, I create. :)
PAYG plans punish me for doing something out the ordinary. Imagine Google on a PAYG Internet plan?
Hence I love Dreamhost. As with a typical cheap account I can tranfer huge amounts as typical users don’t use their accounts as heavily as mine. All for less than 10USD a month.
With T-online’s Web&Walk and Three’s unlimited internet plans, this is the trend. People did not want to pay per byte, hence these recent “ground breaking” developments of flat rate (contract) plans. So that’s why I say no to this type of PAYG.