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Capacity on Demand

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ALSO CALLED: COD, Capacity-on-Demand, On/Off Capacity on Demand
DEFINITION: Capacity on demand (COD) is a purchasing option that allows companies to receive equipment with more computer processing, storage, or other capacity than the company needs at the time of purchase, and have that extra capacity remain unused and unpaid for until the company actually requires it. Vendors are promoting capacity on demand as a cost-effective and time-saving alternative to more traditional  … 
Definition continues below.
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CAPACITY ON DEMAND DEFINITION (continued): …  methods of upgrading. With COD, a vendor might provide a company with a fully-configured 24-processor computer server but only charge the company for the number of processors they actually use. The vendor provides the additional capacity hoping that when the company expands and needs more capacity, they will not look around elsewhere but will simply take advantage of the extra capacity the vendor had already provided. In this scenario, the company would contact the vendor to have the extra processors activated, and the vendor would bill them accordingly. Critics of COD compare the service with … 
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