{"id":32984,"date":"2020-07-23T22:18:51","date_gmt":"2020-07-24T03:18:51","guid":{"rendered":"https:\/\/completeintel.com\/?p=32984"},"modified":"2020-07-23T22:18:51","modified_gmt":"2020-07-24T03:18:51","slug":"cloud-pricing","status":"publish","type":"post","link":"https:\/\/completeintel.com\/ci-markets-weekly\/cloud-pricing\/","title":{"rendered":"How to Make Cloud Pricing More Transparent"},"content":{"rendered":"

This article on \u201cHow to Make Cloud Pricing More Transparent\u201d is originally published at https:\/\/www.eweek.com\/cloud\/how-to-make-cloud-pricing-more-transparent<\/a><\/em><\/p>\n

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eWEEK CLOUD PERSPECTIVE: It used to be nearly impossible to compare cloud costs because different providers typically have their own nomenclature for cloud features, define services differently and offer different tiers of services that don\u2019t line up with one another. Forget apple-to-apple comparisons, cloud price bake-offs were more like contrasting apples to peach cobblers. But help is here.<\/p>\n

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Cloud has inspired almost as much evangelical fervor as open source computing, particularly in the heady 2000s. The advent of cloud computing seemed to render traditional enterprise software vendors as out-of-date as telegraph operators. The monolithic process of releasing software every 18 months wasn\u2019t fast enough for business, running your own servers became as fashionable as generating your own electricity, and the expense involved restricted technology access to the wealthiest businesses.<\/p>\n

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Cloud computing represented a true democratization of enterprise IT, allowing small companies to compete with bigger rivals without breaking the bank to buy servers, storage and software. Tens of millions of dollars for the right to walk onto the playing field were no longer required.<\/p>\n

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The other promise of cloud computing was of a more transparent and equitable business model.<\/p>\n

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In one of my first interviews as an IT reporter, in 2003, I asked the chief technology officer of a large health IT organization to define enterprise software. \u201cIt\u2019s when they can\u2019t tell you the price of the software upfront,\u201d he said.<\/p>\n

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Sure, this lack of transparency reflected the complexity of the forecasting applications<\/span> on offer, but also showed that the dominant sales model gave more power to vendors than customers.<\/p>\n

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The emergence of profitable cloud-native businesses both threatened existing business models and inspired business transformation. The agility and innovation made possible by cloud computing inspired many businesses to move their IT stacks from their own server rooms or data centers to the cloud.<\/p>\n

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<\/a>The law of universal gravitation as applied to the cloud<\/strong><\/p>\n

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By 2020, however, the low-hanging fruit has been picked. Businesses have reaped the benefits of relatively lower costs and more frequent innovation. And with the lion\u2019s share of IT spending at most companies moving into the cloud, cost \u2013 and cost transparency \u2013 matters. Yet, the transparency promised by the cloud revolution has largely failed to materialize.<\/p>\n

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As was the case with the previous generation of technology, obfuscation isn\u2019t a bug, it\u2019s a feature, and it begins with Newton\u2019s Law of Universal Gravitation. Pricing structures at legacy cloud providers punish moving data from one cloud to another. By intentionally making the cost of putting data into their clouds as low as possible, while making it prohibitively expensive to move data out to interact with systems in different clouds\u2014a concept known as data gravity\u2014they are walling in their customers.\u00a0 This is an explicit strategy to make their clouds \u201csticky\u201d and keep forecasting applications<\/span> from moving to other clouds.<\/p>\n

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But the reality is that businesses want and need to operate in different cloud environments for many reasons. Not to mention, who wouldn\u2019t want to cut 10, 30, or even 80 percent of cloud costs if possible?<\/a><\/p>\n

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Newton\u2019s law of motion applied to the cloud<\/strong><\/h4>\n

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It used to be nearly impossible to compare cloud costs because different providers typically have their own nomenclature for cloud features, define services differently and offer different tiers of services that don\u2019t line up with one another. Forget apple-to-apple comparisons, cloud price bake-offs were more like contrasting apples to peach cobblers.<\/p>\n

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There is help available. For one example, Oracle Cloud Workload Cost Estimator<\/a> is a new tool now available for obtaining empirical cost information. It lets customers assess comparative costs of Oracle Cloud Infrastructure and Amazon Web Services in as close to a real apples-to-apples comparison as possible.<\/p>\n

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The calculator prices not only computing and storage costs, but that of IOPS (data input\/output per second), and data transmission out of the cloud as well. That last factor, also known as data egress, is usually a wild card because traditional cloud companies start charging a markup after a given amount of data flows out. So once you hit a monthly target\u20141GB for AWS, according to the cost estimator\u2014data egress charges kick in. At Oracle the meter doesn\u2019t start until after 10,000 times more data egress\u2014or 10 TB\u2014per month.<\/p>\n

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IT leaders can enter the parameters of proposed workloads and then run their own OCI vs. AWS comparisons. In the end, they may discover that one cloud provider offers services that are closer to Newton\u2019s third law (that for every action in nature, there is an equal and opposite reaction) than to his first<\/a><\/p>\n

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A few examples<\/strong><\/h4>\n

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Cost and performance go hand in hand, especially as software-as-a-service providers rely on third parties to serve their software to customers. Data technology firm Complete Intelligence, for instance, provides real-time risk management and forecasting services<\/a> for its customers. It needs to know how much it will spend providing that service on an ongoing basis, and also be sure that its customers get the responsive service their businesses need.<\/p>\n

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\u201cFor us, it’s the entry cost, but it’s also the running cost for a cloud solution. And so that’s critically important for us. And not all cloud providers are created equally,\u201d said Tony Nash, CEO of the Houston-based company, which picked Oracle Cloud Infrastructure.<\/p>\n

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Another example of how modern businesses use the cloud is data integration provider Naveego. The company helps customers parse data from a myriad of sources. It cleans the data, deletes duplicates, provides a trail of sources, and then provides a clean golden record of data that is ready for analytics in real time.<\/p>\n

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\u201cTo do that, we run instances of our product in multiple availability zones. AWS charges for communications back and forth between those availability zones. Oracle doesn\u2019t, and the cost difference ended up being huge for us. So, we decided to move our research and development, and some production, cloud tenancies to Oracle Cloud,\u201d wrote Naveego CEO Katie Horvath in a blog post<\/a>.<\/p>\n

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The company saved 60 percent on its costs since moving to the Oracle cloud, while being able to do more research and development. \u201cOracle\u2019s claims that Oracle Cloud Infrastructure is 65 percent more cost effective on computers have also proven to be true for Naveego,\u201d she says.<\/p>\n

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We\u2019re starting a new decade on an awkward footing, and businesses need technology to help make smarter decisions. They may still want to fail fast, but they will also want to know what went wrong fast, what the fast road looks like to the promised land \u2013 and at long last, what it costs to get there. They\u2019ve long known the cost of sending a telegram, and they can finally figure out the cost of using the cloud.<\/p>\n

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Michael Hickins<\/strong>\u00a0is a former eWEEK and Wall Street Journal editor and reporter.<\/em><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

This article on \u201cHow to Make Cloud Pricing More Transparent\u201d is originally published at https:\/\/www.eweek.com\/cloud\/how-to-make-cloud-pricing-more-transparent   eWEEK CLOUD PERSPECTIVE: It used to be nearly impossible to compare cloud costs because different providers typically have their own nomenclature for cloud features, define services differently and offer different tiers of services that don\u2019t line up with one […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-32984","post","type-post","status-publish","format-standard","hentry","category-news-articles-print-web"],"_links":{"self":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts\/32984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/comments?post=32984"}],"version-history":[{"count":0,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts\/32984\/revisions"}],"wp:attachment":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/media?parent=32984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/categories?post=32984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/tags?post=32984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}