Cloud pricing update: Costs are leveling out
Within the last few months, one trend within the tech industry has been the steady decrease in pricing for cloud environments. Cloud infrastructure providers have been locked in an interesting battle for domination of the cloud market – leading them to reduce prices dramatically. According to Global Industry Analysts, the global cloud computing market is going to be worth up to $127 billion in 2017, and everyone wants a piece of the proverbial pie.
This has led to a distinct movement to have the most competitive pricing structures, because the idea is that customers only look at how much infrastructure costs – despite the fact that there are other factors to consider. Recent reports surrounding this technology and its pricing structures have garnered a lot of attention in the tech space.
That was then . . .
News surrounding cloud pricing has been a mixed bag in the past. A late-2015 survey conducted by Sungard Availability Services found that enterprises were experiencing what they referred to as a “cloud hangover,” which is an unfortunate circumstance where the cloud provider is not entirely up-front about the total cost of the deployed environments. In fact, 74 percent of the respondents reported that they spent $30,000 or more in monthly cloud maintenance fees.
This created an important problem wherein companies that had deployed virtual environments would become locked in with their cloud vendors because the cost of removing their data and applications from the cloud was so high. For example, Fortune’s Barb Darrow reported in October 2015 that Amazon Web Services customers, especially, were worried about vendor lock-in with their service provider.
. . . This is now
According to Cloud Tech contributor James Bourne, however, cloud prices are beginning to stabilize. Bourne cited a study conducted by Tariff Consultancy, which found that cloud price tags are reaching an equilibrium, whereas in recent times their downward trajectory proved almost troubling. The TCL report found that on average, an entry-level cloud instance costs around $0.12. In addition, Fortune reported that RBC Capital Markets analyst Jonathan Atkin, who follows cloud pricing structures and reports on current trends, also found that prices are starting to simmer. It follows that as cloud services become more diverse and adoption creeps upward, prices will even out, which is good news for the market in general.
“Cloud prices are starting to simmer.”
Public cloud providers and the problem with pricing
Big public cloud companies have been locked into a cost structure war for some time, and according to FierceCIO, Google and Amazon have recently revived their own battle. Each company claims that the other’s pricing model is flawed, and they have traded jabs back and forth for some time now. For instance, Google warned that Amazon’s price cuts might be appealing, but the cost of Google environments is actually better across the board. While that may or may not be true, it’s indicative of this kind of banter back and forth that occurs between two large public cloud companies.
Companies looking to deploy cloud environments and enhance their IT infrastructure with all of the advantages of cloud computing need to partner with a private cloud provider that won’t increase fees or prices unnecessarily – a provider that isn’t embroiled in the current war between the bigger public cloud companies. Choosing Faction Cloud is the best idea for those companies looking to avoid vendor lock-in, because at Faction, all of the fees and pricing are revealed up front – no surprises. Contact the cloud infrastructure experts at Faction today for more information.