Why Cloud Pricing Comparisons Are So Hard - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Cloud // Infrastructure as a Service
09:44 AM
Connect Directly

Why Cloud Pricing Comparisons Are So Hard

Cloud infrastructure market doesn't have a standard unit of computing power, which makes it tough to stack up Amazon, Microsoft, and Rackspace offerings. Third in our series on cloud computing pricing.

Rackspace, one of the other more established cloud computing companies, sidesteps specifying what the virtual CPU is and uses RAM memory sizes as its main differentiator in cloud server sizes and prices. In an interview, John Engates, CTO of Rackspace, says its equivalent physical CPU for a virtual CPU is a four-core AMD 2350 HE at 2 GHz, a late model 2007 processor. Rackspace says that one 2350 HE core at 2 GHz is the equivalent of two of Amazon's Elastic Cloud Compute units (ECUs). Still, even with a physical CPU reference, "it's difficult to make a comparison," Engates acknowledged. Rackspace also delineates servers at regular RAM intervals without giving them a small, medium or large designation.

What Prices Reveal About Strategy

All the variations of CPU, RAM, and disk make head-to-head comparisons difficult, but they do reveal something about each vendor's strategy.

Microsoft, as we noted, almost matches Amazon on RAM in small servers while offering more CPU. But on larger cloud servers, it concedes the RAM lead to Amazon while still offering more CPU and disk. Microsoft seems bent on competing most fiercely with Amazon at the extra small and small categories, playing for the small- to medium-sized business, or the enterprise department, while giving Amazon less of a fight for the largest and most demanding cloud customers.

Rackspace's pricing shows less appetite for a confrontation with Amazon. It was the first to really push a super-small server option--offering an entry-level server for 1.5 cents an hour when Amazon's lowest priced unit was 8.5 cents. That small-and-cheap offering could be significant in a market where many prospective users start very small, either with a startup or with a small enterprise app dev use. Amazon and Microsoft eventually countered with their very small server options, but none gets as low as Rackspace with an instance of less RAM (a 256-MB server), still at just 1.5 cents an hour.

All this highlights the highly sophisticated analysis that might be needed to truly scope out the price-and-value of public cloud computing--especially if a big company is going to adopt it for large-scale computing, where small cost differences can up to big numbers.

Consider Netflix's experience. Amazon has set a high standard for performance with its infrastructure as a service. But customer Netflix found through its own careful workload performance analysis that it could lose 1% or more of its CPU cycles to "noisy neighbors" if its workload landed on a physical server that was already busy with another customer's active virtual machines. Netflix chief cloud architect Adrian Cockcroft aired his staff's findings in a March 2011 blog, explaining that the wait for access to I/O and other resources crimped performance. Netflix started commissioning only the largest sized virtual machines. That meant a Netflix workload dominated its Amazon host and might even be the only resident on it. Most customers in the multi-tenant cloud can't do that because they don't have large enough workloads--or probably the analytical experience to figure out the cost basis for it.

If an IT shop is using Rackspace, the picture is complicated even farther by the fact that each Rackspace virtual server has access to all four cores of an AMD 2350 HE host, with a weighted share of each core guaranteed. However, if the other customer on that core isn't using all its CPU cycles--maybe it's a website in a low traffic period--the other customers can use those cycles for free. But that's unpredictable and makes comparisons to the physical server world all the more difficult. Some benchmarks published on customer experience with Rackspace indicate workloads run faster there than in other cloud settings, but that success may depend on landing on hosts where the other customers had lightweight workloads at the time the test ran. On an occupied server at the end of the quarter, when companies are using capacity to close their books, the benchmark results might be different.

More than 900 IT and security professionals responded to InformationWeek’s 2012 Strategic Security Survey. Our results cover a variety of areas critical to information risk management, including cloud, mobility, and software development. Download the 2012 Strategic Security report now. (Free registration required.)

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
2 of 3
Comment  | 
Print  | 
More Insights
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

IT Leadership: 10 Ways to Unleash Enterprise Innovation
Lisa Morgan, Freelance Writer,  6/8/2021
Preparing for the Upcoming Quantum Computing Revolution
John Edwards, Technology Journalist & Author,  6/3/2021
How SolarWinds Changed Cybersecurity Leadership's Priorities
Jessica Davis, Senior Editor, Enterprise Apps,  5/26/2021
White Papers
Register for InformationWeek Newsletters
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Flash Poll