Cheaper by the
Dozen
Latest 451 Research Cloud Price Index reveals potential savings enabled by using multiple
cloud providers - and uncovers opportunities for providers who integrate and manage
these services as a managed offering, such as First for Cloud, South Africa’s original cloud
services brokerage.
A
nalyst firm 451 Research has released
findings which show that cloud buyers can
make substantial savings by mixing services
such as compute and storage from multiple
providers.
The analysis reveals that if cloud buyers mix and match
services and make long-term commitments to their providers, they can make substantial savings, starting at 58% for
a small application and up to 74% for a large application.
451 Research’s Cloud Price Index is designed to give
enterprises and service
providers insight into the
cloud pricing landscape
so they can make more
informed decisions
when buying and selling
cloud services.
Like a consumer price
index, 451 Research’s
Cloud Price Index is
made up of a basket of
goods, but in this case,
it is a specification of
the services required
to operate a typical
web server application
including compute,
storage, databases,
management and more.
“The CPI shows it is
possible to achieve substantial savings by using multiple
providers; however, we believe the complexity of dealing
with various providers offsets any advantage at this time.
Technically, there is no reason why applications can’t be architected across multiple clouds, but the potential challeng-
es organisations face include latency between datacentres,
managing different GUIs and APIs, invoicing, documentation, and support functions. As a result, we believe most users would prefer to pay a premium for an integrated solution
from a single provider,” said Dr. Owen Rogers, Research
Director of 451 Research’s Digital Economics Unit.
“Through this analysis, we believe we have identified a
tremendous opportunity for providers to bring a retail-model
discipline to cloud service selection and creation,”
Rogers added.
“For example, providers
could offer decision engines to help enterprises choose the best-value mix of services to
suit their needs, and
then integrate and
manage these services
as a managed offering.”
The chart on the left
shows the average
monthly price for each
of 451 Research’s
baskets of goods, representing typical large
and small application
use cases, for both
on-demand and bestcase pricing.
Best-case pricing takes
into account savings achieved as a result of negotiation,
long-term commitments or volume discounts. The chart also
shows the cheapest price for delivering the whole application using a single provider and the cheapest price achievable using multiple cloud providers.
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