The cost of cloud computing

Featuring an analysis of the top 3 cloud computing companies by Dion Hinchcliffe in terms of current pricing and feature sets.This is probably one of the first time a cost, feature benefit of cloud computing is being examined and from the looks of it this space is gong to get red hot in future.

Lessons from today’s cloud computing value propositions

Taking a look at all this, I’ve come away with five conclusions about the top providers of cloud computing today given their current pricing and feature sets:

1. Amazon is currently the lowest cost cloud computing option overall. At least for production applications that need more than 6.5 hours of CPU/day, otherwise GAE (Google Apps Engine) is technically cheaper because it’s free until this usage level. Amazon’s current pricing advantage is entirely due to its reserved instances model. It’s also the provider with the most experience right now and this makes it the one to beat with low prices + maturity. However, expect subscriptions from Azure to give it a run for its money when Microsoft’s cloud platform formally launches in a few months (probably November).
   
2. Windows costs at least 20% more to run in the cloud. Both Microsoft and Amazon offer almost identical pricing for Windows instances while Google App Engine is not even a player in Windows compute clouds. There are undoubtedly cheaper offerings from smaller clouds but they are less likely to be suitable for enterprise use, though certainly there are exceptions.
   
3. Subscriptions will be one of the lock-in models for cloud computing. Pre-pay for your cloud to get the most value and you’ll get great prices. But you’ll be committed to providers for years potentially without a way to leave without stranded investments.
   
4. Better elasticity does not confer major price advantages. GAE is one of the most granular of the cloud computing services, only requiring for you to pay for what you actually use (for example, you have to commit to at least an hour of compute time at a time from Amazon) but does not provide a major cost advantage for large applications.
   
5. You can’t pay more for better uptime and existing SLAs are not sufficient for important business systems. It’s unclear why, given open questions about cloud reliability, why no vendors will offer differentiated service where enterprises can pay more for a better SLA. The best you can get right now is also the worst, or 99.95% uptime. This is about 4 hours of expected but unscheduled downtime a year. For business critical applications, this is still too much. This will end up being an opportunity for other vendors entering the space though I expect the Big 3 listed here will improve their SLAs over time as they mature.