Tier

Many times, rates depend on an input parameter (i.e. you get a different price if you buy 1 candy that if you buy 1.000 of them). In IT, many times you get a free tier and a paid tier. For instance, Amazon offers a free tier for new users, and many of their rates are tier based.

Example 1: The price of the CPU is different depending on the number of CPU 0-4 CPU -> 4$/month/CPU variable, 0 fixed 5- CPU --> 5$/month/CPU. 16$ fixed

A VM with 3 CPU will be charged 0 + 4 * 3 = 12$/month A VM with 6 CPU will have different options:

1. Apply the tier in full (like the candy example): 16$ + 6 * 5$ = 46 $
2. Apply the tier only with the metrics within the tier: 16$ + (6-4) * 5$ = 26$
3. Apply all tiers with the metrics within the tier: 4 * 4 + 2 * 5 +16 = 42$

Depending on the circumstances, the three strategies can be used.

In addition, tiers can depend on other parameters in the context: 0 - 100 users in the system --> 5$ /user /month 101 - users in the system -> 4$ / user /month

In this case, the number of users in the system needs to be part of the context of the calculation, and be used to determine the tier to be used.

Another example: AWS support cost is tiered on the average expenditure for the account during the month, as a minimum of 3% of the bill.