One of the largest potential savings of cloud computing is the ability to shut off the hourly-charge meter when the server instance isn't being used. But many users sign up for a cloud server as if they plan to use it every minute of every day for the next year.

That's one finding from the statistics from RightScale's PlanForCloud, a free tool customers can use to forecast anticipated cloud spending.

RightScale, a front end cloud workload management service, acquired PlanForCloud, an Edinburgh, Scotland, firm, last year and has kept its free online service available at www.planforcloud.com. On July 23, the company announced that PlanForCloud had completed cloud cost forecasting for 9,500 deployments with an expected cloud service use amounting to $1,016,619,975.

In analyzing the statistics behind that amount of cloud use, PlanForCloud found more than half of EC2 customers use Amazon Web Services reserved instances, where the customer pays an upfront fee for a set amount of use, then receives a lower hourly rate. Reserved instances come in three sizes: light, medium and heavy.

[Want to see how Cloudability handles the issue of cloud expense forecasting? See Cloudability Sheds Light On Cloud Spending]

A majority of reserved instance users "go all in and commit to the highest level," or heavy utilization, the RightScale analysis showed. As a result, they pay a charge as if their servers were running 24 hours a day, seven days a week for the one-year or three-year period. And while the greatest savings are available through the three-year agreement, only 20% of AWS customer organizations are willing to commit to the longer term.

Amazon advises that light utilization means: "periodic workloads that only run a couple of hours a day, a few days per week, or very sporadically," such as disaster recovery servers, according to information on its web site. Medium utilization workloads "are best suited (to) run most of the time, but have some variability in usage (like web server traffic where demand may increase or decrease throughout the year)." Heavy utilization "is most appropriate for steady-state workloads where you're willing to commit to always running these instances in exchange for our lowest hourly usage fee."

By these definitions, some "heavy" workloads might more economically be managed as "medium" jobs, if usage was light during part of the day, or the owner was willing to turn them off part of the time.

The heavy utilization -- continuously running -- classification for a standard AWS large server for one year results in an upfront reserved instance charge of $676 and an hourly charge of $0.056. The same server classified as a medium utilization reserved instance results in an upfront charge of $554 with an $0.084 hourly rate. The same server with a light utilization designation would result in a $243 upfront charge and $0.136 hourly rate.

Compared to the more expensive on-demand instances (which have no time-frame attached), the medium reserved instance results in a 39% saving over the course of a year and a 59% saving over a three-year term.

The PlanForCloud statistics indicate that the bulk of cloud computing costs lie in the compute instances and amount to 70% of the bill. So concentrating on right-sizing an instance, setting a realistic utilization rate, and committing to the longest possible period deemed safe should all be part of a strategy to reduce your company's monthly cloud bill.

As opposed to compute costs, storage made up 18% of the bill, data transfer costs, 6%; and read/write transaction charges and other costs, the remaining 6%.

The 20% of customers who commit to three-year reserved instances get to save up to 65% compared to an on-demand instance bill. RightScale spokesmen said that low rate of participation probably reflects the fact that many workloads sent to the public cloud are expected to have less than a three-year life span.

The RightScale tool competes with cloud cost management and projection engines from Cloudyn, Cloudability, Newvem, Uptime Software and CloudCruiser. PlanForCloud is not focused on usage statistics the way some of the other cloud bill management systems are. It takes the information input by the potential cloud customer, consults its 12,000 data points on cloud pricing, and projects the bill, RightScale spokesmen said.

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