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Dell launches a new cloud payment model to take on Amazon, Microsoft and Google

  • Dell is introducing a pay-as-you-go cloud services model.
  • CEO Michael Dell says software as a service companies are starting to realize the public cloud is too expensive.
  • He says his company could save Snap some money on cloud services.

Dell is launching a pay-as-you-go model for its cloud services business as an alternative to the offerings of rivals Amazon, Microsoft and Google, CEO Michael Dell told CNBC on Monday.

The change in pay model was "a natural evolution," he said on "Squawk Alley."

"We've been gradually embracing this for some time, but we talk about this as consumption models. So, pay-as-you-grow, pay-as-you-use, pay-per-use — and we're absolutely embracing that. It's what our customers are asking us to do, and we're happy to do it," said Dell.

Dell said leading software as a service companies are starting to realize the public cloud is too expensive, which has led companies like Dropbox to pull out. "Because the operating cost of the infrastructure itself is too large of a cost relative to their overall P&L," he said.

"We've seen a bit of a boomerang effect where, you know, customers have run to the public cloud and say, 'Hey, wait a second, this is more expensive,'" said Dell.

In an interview with CNBC, Dell also said this new offering would be good for Snap — which is a large user of cloud services and reports earnings for the first time this week.

"I guarantee you we can save them some money," he said.