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Video: Measuring Unit Costs
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Takeaways: Measuring Unit Costs
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Knowledge Check
2.3.1 Measuring Unit Costs
Unit Costs are a key way to communicate both the cost and the value of what an organization is doing in cloud.
A common definition for unit economics is direct revenues and/or costs, in association with a particular business value, which are expressed on a per-unit basis. Metrics enable you to determine the value you will gain from a single unit of your business and the cost associated with servicing it, ultimately revealing the business value of spend. For a customer-facing application, that unit might be a user or customer subscription; for an ecommerce platform, it might be a transaction; and for an airline, it might be a seat. Over all other things, the goal with a unit metric is to bring business meaning or context to the cost of producing a business capability.