Understanding and managing the cost of the cloud

1. Summary

While computing in the cloud can cost less than running servers in your enterprise data center, the question of how much less isn’t an easy one to answer. Like a 1960s-era car salesman, cloud service providers do a great job of hiding the actual numbers and instead presenting buyers with long, confusing lists of à la carte pricing. Some don’t even offer access to a full price list until you sign up for their service. Others hide their services behind a web calculator page that has dozens of variables, many of which you won’t really know until you begin using the actual services.

The issue has gotten more complex, as Amazon and others have dozens of different cloud services available. Now cloud computing requires not only running a virtual machine on someone else’s data center but also provisioning the right collection of resources such as RAM and CPU to match the kinds of applications and loads you will be running on these machines. Being able to easily see these configuration trade-offs in the bottom-line monthly bill is important as more servers migrate to the cloud and are used for more mission-critical tasks.

In this research note, we will look at some of the current challenges of calculating cloud costs when using services from the major Infrastructure-as-a-Service (IaaS) vendors, some of the more important pricing issues to understand, noteworthy third-party vendors to watch, and our predictions for the future.