Technology innovation supports the business needs of software companies in a number of increasingly important ways. But as we like to say, today every company has become a software company—and so changes that are impacting technology are no longer affecting only technology companies. Businesses of all shapes and sizes are now experiencing important changes that in the past might have impacted only a small slice of the business world.

The cloud revolution is rolling forward at an incredible scale, and on-premise resources are becoming virtual and dynamic, scaling to demand. Containerization is providing a powerful new way to optimize resources for demand. And, on top of all of that, monolithic software is transforming into microservices to deliver performance and flexibility in a way never before possible.

Many powerful services—including New Relic—have been created to support software companies during this evolution. Using New Relic to take advantage of these innovations has never been easier or more important. And now it’s time to bring that evolution to another critical area of our service offerings: today we’re excited to announce a new model for New Relic pricing that is tailor-made for future architectures.

As our business has grown, we came to see an opportunity to create software pricing models that better align with and support the latest technological advances. In an age when software companies have almost unlimited choices in the type of computing resources they use to run their workloads, we know that customers want pricing that is equally flexible and that takes into account new cloud environments. Relying solely on one-size-fits-all pricing models can actually hold back widespread adoption of these new and better technologies. It is not enough to innovate in technology—we want to innovate in pricing as well.

That’s why New Relic is so excited to introduce our Cloud Pricing Option: a simple, flexible, and transparent way for our customers to purchase New Relic APM. Cloud Pricing is an additional option for customers to purchase New Relic APM, an alternative to existing host-based pricing, and is ideal for customers running their applications in dynamic cloud environments.

The Cloud Pricing Option is simple

The Cloud Pricing Option allows customers to purchase New Relic APM based on the size of the instance on which the monitored application is running, and the time it is connected to New Relic. The unit of measure, Compute Units (or CUs), is calculated as follows:

# of CUs = (# of CPUs + # of GBs of RAM) x hours used

For example, say you are using New Relic APM on an application running on an AWS t2.micro instance, which is running 24×7. A t2.micro has one virtual CPU and 1GB of RAM. If we assume 750 hours for a month of use, then:

# of CUs = (1 CPU + 1 GB of RAM) x 750 hours = 1,500 CUs

Cloud Pricing is not a pay-as-you-go model; customers estimate and pay for an allocated number of CUs monthly.

The Cloud Pricing Option is flexible

Since customers purchase an allotment of CUs, the Cloud Pricing Option does not tie the allocation to specific hosts or instances.

Flexibility for bursting

Many applications run in the cloud take advantage of bursting—spinning up and spinning down instances to accommodate busy periods and seasonal variances. Additional instances may be spun up for a few hours a day, or for a specific event, or on a regular schedule. Since the Cloud Pricing Option gives you an allocation of CUs for a given month, this can be taken into account when determining the size of the subscription required, allowing you to use your allocation of CUs over the month to fit your needs.

Flexibility for changes in environment

Over time, your environment may change. You might determine that your application needs a different mix of computing resources: more CPU, less RAM, for example; or more RAM and less CPU. Since New Relic’s Cloud Pricing Option is tied to the underlying compute resources across all instances instead of specific instance types, there is no impact to your subscription.

The Cloud Pricing Option is transparent

Since CUs are calculated based on the size of the instance and hours connected, it is very easy for our customers to know up front what the estimated usage of APM monitoring will be when they consider a change to their environment, such as adding new instances or moving between on-premise and the cloud or among cloud vendors.

Further, with our updated Usage UI, customers will know their usage at any time. The Usage UI will be automatically updated to show your usage statistics. Soon, the table that accompanies the chart will be filterable and sortable, as well as downloadable, to help you see exactly where you stand with regards to your subscription and your usage, and to enable you to analyze which applications, locations, etc., are contributing to your New Relic usage.

apm usage screenshot

[click to enlarge]

An innovative pricing approach for evolving technology

New Relic is proud to introduce the Cloud Pricing Option and provide a fair and flexible approach to APM subscriptions. Designed to meet the challenge of today’s dynamic environments and enable you to grow your business in the cloud or enable a shift to the cloud, New Relic’s Cloud Pricing Option is available now for our customers monitoring applications running in the cloud.

To learn more, go here for information on the differences between the Cloud Pricing Option and host-based pricing, and here for details on Cloud Pricing Option account usage.


Peter Vinh, principal product manager for New Relic APM, contributed to this post.

Todd Etchieson is vice president of product management for analytics at New Relic. Before joining New Relic, he worked as an engineer and product manager in the telecom, defense, and e-commerce industries. He holds a Bachelor of Science in Electrical Engineering from Texas A&M University and a Master of Science in Telecommunications from Southern Methodist University. View posts by .

Interested in writing for New Relic Blog? Send us a pitch!