August 13, 2011 Elastic pricing for clouds is not a requirement
There is more than one way to do cloud billing. Many deployments out there use the Amazon way of billing for things — no commits, pay-per-use. I think a reminder needs to be given that pay-per-use billing isn’t the only way.
For example, bandwidth providers typically, charge 95-percentile. Meaning, the customer pays for capacity, whether or not they use the capacity. Customers are expected to pay for a bandwidth pipe of some size, for some time interval.
Elasticity comes at a cost. It means that providers need to provision for peaks. While customers only pay for usage. While that may sound ideal for users of cloud services, it does mean higher costs for providers.
Providers need to provision for peaks while only get paid for the shaded area.
Not every customer’s workload is elastic and elasticity isn’t the only feature of infrastructure clouds. Ease of deployment, available tooling, services like managed databases and storage are all valuable components of an infrastructure cloud.
As OpenStack becomes more mature, more boutique firms will come online that offer unique services. In this context it may be perfectly reasonable to ask for commits over a longer time-frame. That means that the provider only needs to provision for the committed workloads and, in turn, offer better pricing to their customers.
- 2 comments
- Posted under Cloud, OpenStack, Uncategorized
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Tom G. Price
said
Joe, glad to see some info on cloud pricing. A company called Cloud Cruiser just announced a cloud cost management solution for OpenStack. Here’s a link to the release:http://bit.ly/qAKSql. If you would like a demo, just click here: http://www.cloudcruiser.com/solutions/request_a_demo.asp.
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John
said
Consumption pricing makes total sense in a public cloud offering that caters to a diverse set of customers (and therefore likely a diverse set of use cases). With consumption pricing, customers win because they only pay for what they use, and providers win because (since everyone’s usage peaks don’t happen at the same time) they can charge for 100% of the usage instead of billing at a 95 percentile rate.
However, smaller cloud offerings (including internal, private deploys of cloud infrastructure) absolutely need to calculate cost based on capacity, not consumption.