Friday, August 29, 2014

Cloud Pricing: The Race to the Bottom Continues

Monthly Slogan: It’s Never Been Cheaper

A lot of our clients use cloud services like Microsoft Azure, Amazon WS, and the Google Cloud Platform. Some are doing BI tasks (think analytics services and storage) while others are hosting their production sites (think 24/7 scaling compute instances).

What continues to surprise me is the cadence of recurring price drops. This year itself was even more notable than 2013, with yet another round of massive price drops announced by Google, Amazon, and Microsoft.

Since 2008, Amazon has announced 43 price drops to its cloud services. That’s an average of over 7 price reductions a year, and 2014 still isn’t done yet! This trend has continued to put money back into the hands of CIOs who have made it a priority to shift infrastructure to cloud services (E.G. Google’s cloud storage got 68% cheaper in March).

Price Drops Across the Board

The price drops haven’t been uniform across the board. Consistent with last year, this year’s most massive price drops seem to be targeted towards compute and storage costs. Since compute costs are normally the highest component of the bill (70-90% of overall cloud costs), this is great news for those already invested in cloud computing infrastructure.

Below are some charts speaking to trends in 2013 by RightScale. 2014 is likely to show just as aggressive price decreases.




Better Tools

It’s not enough just to mention the price drops. The tools for interacting with everything from cloud storage (queues, tables, blobs), hosted databases (SQL, NoSQL), computes/auto scaling, and even PaaS deployments has also become a LOT easier to use in the last 12 months. This means your developers will likely spend even less time this year coming up to speed in these technologies than they would have last year.

The Water’s Warm

The cloud services story continues to get increasingly attractive. As more services become available, as the tool chain becomes progressively polished, and as more price drops follow; it may soon become a notable decision to not host your services in the cloud.