What is a key difference between On-Demand and Reserved pricing in Oracle Cloud?

The distinction between On-Demand and Reserved pricing in Oracle Cloud primarily lies in the payment structure and commitment level involved. On-Demand pricing operates on a pay-as-you-go model, where users pay for services based solely on their actual usage without any long-term commitments. This approach is particularly beneficial for users who have fluctuating workloads or require flexibility without being locked into a contract.

In contrast, Reserved pricing incentivizes users to commit to a service for a longer period, typically one or three years, in exchange for significant cost savings. By pre-paying or committing to a specific amount of resources, users can leverage discounts, which result in lower overall costs compared to the on-demand pricing model.

This fundamental difference makes choice C accurate, as it highlights the pay-as-you-go nature of On-Demand pricing versus the long-term commitment of Reserved pricing, along with the associated discounts for such commitments. Understanding this helps users make informed decisions on which pricing model best fits their workloads and budget strategies.