Power-by-the-Hour

Refers to a type of contract. The first widely reported general use of power by the hour was in connection with a high wing four-engine regional jet then named the BAe 146 (and later the Avro RJ.) Despite certain advantages, in particular, short take off capabilities (it was the only jet initially allowed to fly out of tiny city centre airports such as London City), the aircraft was initially unsuccessful due to the higher maintenance costs of its four engines and their perceived reliability problems. In response, the engine manufacturer devised a contract in which they did not sell engines to the owner of the aircraft, but rather sold engine usage time, which to the airlines was attractive because liability for maintenance and service rates fell on the engine manufacturer and was not specific to a particular engine (i.e., the manufacturer needed to have spare swap out engines to hand). The contract was known as a ‘power-by-the-hour’ agreement.

Since then, power-by-the-hour has come to be used in a wide array of applications including the supply of mainframe computer time and other services. Metering is not necessarily by time, it may be on a wide array of usage metering bases, for example, IBM uses a similar benchmark called MSU or measured service units that are akin to MIPS

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