By 2021, 94% of the internet workload will be on the cloud, according to our friends at Cisco. Take a moment to let that sink in. Most companies are using a hybrid strategy, with the ‘big three’ commodity clouds going head to head to make their cloud offering the most cost-effective. Here’s what you need to know.
Cost Benefits of Cloud Computing
The overall cost benefits of the cloud come down in large part to hardware responsibilities. If your on-premises hardware fails, that’s a hefty cost on your own business bottom line. On the cloud, even if a VM, a server, or an entire data center goes down – that’s the responsibility of the cloud provider, and you can continue with business as usual.
Running costs can also be a lot cheaper on the cloud than on-premises, because of PAYG pricing and elastic scaling capabilities, for example. To understand how each of the main public cloud providers handles their customer pricing – let’s turn to a cloud pricing comparison – and break down their unique pricing benefits, with some of the cost innovations that each provider is particularly proud of.
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Amazon AWS Cloud Pricing & Costs Explained
AWS splits its cloud pricing benefits into three categories. The first, is Pay as you Go. They compare this to the way that you pay for your utilities. You pay only for the services that you use, and when you use them. This diagram shows how they compare the cost of on-premises to using AWS, complete with the added costs of underutilization.
AWS’s next tool is Reserved Capacity. This is a common cloud concept, and means that if you know you’re going to need a certain amount of compute or storage for example, you can reserve this ahead of time, and slash your costs. This could save you as much as 75% over the on-demand pricing, a great way to reduce costs on AWS.
Lastly, AWS offers Volume-based Discounts based on economies of scale. For something like storage when looking at Amazon S3 pricing, for example, the more you use, the less you’ll pay for each GB. Up to 50TB of storage is 0.023 GB/month, while 500TB+ will reduce the cost to 0.021 GB/month. These can really add up. The AWS pricing calculator can be used to estimate AWS cloud pricing ahead of time.
Google GCP Cloud Pricing & Costs Explained
Google Cloud pricing is also built around a pay-as-you-go model, and promises no activation or termination fees. On top of this, your Google Cloud cost can be considered alongside the following added cost benefits:
Preemptible VM Instances: If your workloads don’t need steady availability, such as background processes for data management for example, set them up to be interrupted where necessary, and save up to 79%.
Per-second billing: With Google Cloud VM pricing, you really pay for exactly what you use, by the second – and no further.
Sustained-use Discounts: Thinking about Google Cloud compute pricing? If your workloads are running a significant amount on Compute Engine and Cloud SQL each month, you’ll be automatically eligible for a discount of up to 30%, as seen below.
Committed-use Discounts: While sustained-use discounts help you reduce costs on long-term or larger projects, committed-use discounts are great for users with just a few projects. These can be agreed ahead of time, and you’ll get a discount of up to 57%, without any lock-in.
The GCP cloud cost calculator can be found here.
Microsoft’s Azure Cloud Pricing & Costs Explained
Microsoft Azure’s cloud pricing also comes with the ability to reserve instances ahead of time, but with a one or a three-year commitment to lock in the price savings. You can exchange or cancel your instances at any time, to make it work for a growing or evolving business model.
There are some added bonuses when it comes to Azure cloud cost control.
First, you will pay less for development and testing resources, including zero software charges for Azure VMs, and reduced dev-test pricing on additional Azure cloud services.
Azure also has a similar process to preemptible VM instances on GCP. Spot VMs are 90% most cost-effective than traditional Pay-as-you-Go VMs on Azure, and are used for interruptible workloads.
You can also use Reserved Instances in a similar way to Reserved Capacity or Committed Use Discounts. By agreeing ahead of time, cost savings can be more than 70% over Pay-as-you-Go. On top of this, Azure has a Hybrid Benefit offering, that means you can use your existing licenses from Windows Server or SQL Server, with software assurance. As you can see below, this results in even deeper savings where applicable. Here’s the Azure pricing calculator that can help you make sense of it all.
So there you have it! The three main commodity cloud providers – with their price benefits. We’re sure this gives you a lot to think about.
Faddom can help you to analyze your existing cloud costs, and help with right-sizing your instances or making smart changes to your cloud infrastructure to save on your monthly cloud expenditure.