I see. But I'm not convinced, let me explain why: - Until proven otherwise I assume that the demand for VMs in clouds follows the general "internet load curve"

I see. But I'm not convinced, let me explain why: - Until proven otherwise I assume that the demand for VMs in clouds follows the general "internet load curve" (peak demand = 1.5x avg demand; plateau during the day; peak at 19:00). With the normal monthly billing you just see the variable load on the host node, and the server must have spare capacity to handle the peak load. With hourly billing, the peak load will not vary, only the fact that your customers spin down VMs on non-peak times. So basically my point is that hourly vs monthly billing doesn't change anything demand/load-wise. The only difference is the billing; you basically have to recoup your lost revenue from the non-peak times by generally higher hourly pricing. - If you colocate your (few) servers you can also shut them down to save energy. If you have a contract with usage based power bills.