One of the great flaws of the public cloud has been its overly complex pricing structure.
Considering that the technology has been pitched as being a great way to increase efficiency and cut costs, the inability to accurately price and budget for cloud consumption has been a major weakness that has resulted in cloud not fully realising its potential as a tool that brings cost efficiency.
This failing is particularly damning when the leading public cloud vendors have all been participating in a ‘race to zero’ when it comes to cloud pricing.
What this basically means is that the leading vendors, such as Amazon Web Services, Google Cloud Platform, Microsoft Azure, have all basically entered into a race to get cloud storage to cost zero, or as close to it as they can get.
Although these companies have all frequently slashed their prices, AWS has already cut its prices 52 times, the lack of transparency and ease of billing management has left many customers frustrated.
Firstly there is the issue of the race to zero, which it would seem that Microsoft is backing out of in light of its recent Brexit price hikes.
Although Mark Smith, Senior Director, Cloud and Enterprise Business Group, Microsoft UK, told CBR that, “If you look at our pricing it is on a level playing field with our competitors, we’ve recently reduced the prices of some of our services to align with the likes of Amazon.”
While Smith said that the company has put down the prices for some of its Azure services, the headline is that the company will raise some UK prices by up to 22%, none of its competitors have done this.
Microsoft appears to be the only of the big three cloud vendors that is putting its prices up. Google is keen to argue that it is the cheapest cloud, as highlighted by its messaging during the Google Cloud Next conference in London last month, while AWS has spoken of more price cuts, and cloud challenger Oracle is also keen to be at least as cheap as AWS.
Oracle’s Depak Patil, VP, Development at Oracle and formerly of Microsoft where he spent 16 years, told CBR that Oracle realised that it couldn’t just be incrementally better than AWS and Azure it had to “leap frog them” in terms of pricing but also what the customer gets for their money.
The race to zero might not be for everyone but the cost of cloud is one of the core reasons why businesses look at the technology in the first place.
The majority of research over the past year from the likes of Forrester, or IDC, tends to point to cost savings as one of the core driving factors for moving to the cloud.