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Pay-as-you-go (PAYG) licensing model

Many software developers offer a Pay -As- You -Go (PAYG) licensing model. This means that the amount of payment depends on the actual use of the end customer. This article explains the use and possible applications of PAYG.


Pay -As- You -Go is a commonly used payment model for Software as a Service (SaaS). With PAYG, the end customer only pays based on consumption, number of users, storage space, or number of actions. PAYG is almost only available for Cloud services such as Azure, Skype, and Power Apps.

Azure Billing Policy

Pay-as-you-go means that payment only needs to be made when a specific license is used. The organization purchases the pay-as-you-go license and thus ensures that employees can use this license. If this is not used for a certain period, nothing will be paid. If this is used a lot, the bill will also be proportionately high.

Microsoft Teams

Microsoft Teams can also be purchased via a pay-as-you-go option. In this case, users can receive unlimited calls without having to pay for them. If users call someone themselves, they must be paid per minute of calling. This is done through 'Communication Credits ' or 'post-usage billing '. The latter only applies to new commercial calling subscriptions. The PAYG licenses are linked to users based on where those users are calling from.

Microsoft Skype (Skype credit)

Skype includes a pay-as-you-go model. This model works based on credits, you can purchase these and then make calls with them, similar to calling credit. Depending on the number of minutes called, credits are debited from the account. If there are not enough credits in the account, new credits must be added to the account.

Microsoft SQL Server

Through Azure Arc, it is possible to purchase SQL Server 2022 according to the Pay-As-You-Go billing model. To install the Azure extension for SQL Server 2022, an Azure subscription is required. The pay-as-you-go model therefore requires a connection to Azure Arc. Both the Enterprise and Standard versions have the pay-as-you-go option. The standard SQL Server 2022 Core rates are $73 per month and $0.10 per hour. The cost for the SQL Server 2022 Enterprise core is $274 per month and $0.375 per hour. Because Microsoft uses dollars and the exchange rates cause the amount in euros to fluctuate, the prices are shown in dollars.

Office 365 / Microsoft 365

It is also possible to take out a PAYG subscription for Microsoft 365. The user is asked to pay an amount every month that can be calculated based on the number of users and the number of times Microsoft 365 has been used. This way, a company can easily adapt to the number of people Microsoft 365 needs and avoid unnecessary costs.

Power Apps

Microsoft has introduced a new way of paying for Power Apps with the pay-as-you-go licensing model. This way, users can get started with sharing and building applications without having to purchase a license in advance. Payment will now be made afterwards for the number of users who actually started using Power Apps. This means that no unnecessary overhead costs arise for companies because there is no need to estimate the number of licenses that need to be purchased, but you are paid exactly for what has been used.