Beware Cloud Price Wars' Dark Side

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dfowlerinu,
User Rank: Strategist
5/22/2014 | 2:52:27 PM

Re: Cloud buyers beware

Agree. All clouds are not created equal and like most industries there are the low cost raw technology providers and then the providers who add value that allow the technology to be more useful for solving business problems.

The latter group...Managed Clouds and Managed Service Providers for example...are not just offering hosting but services on top such as capacity planning, security, compliance and 7/24 real person support. The interesting point is that in many cases these companies have built business models that can offer the added service with their hosting at the same price or slightly more than the reduced pricesfrom Amazon and Google.

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LaurieH036,
User Rank: Apprentice
5/22/2014 | 2:36:30 PM

Re: Cloud buyers beware

Indeed. Price isn't everything. And, with commodity hosters like AWS, you don't know where your data is. If you ask, they won't be able to tell you exactly where it is. If you are in a highly regulated industry (like health care), you would be smarter to go with a secure cloud provider and a private cloud or dedicated private cloud at that. Not only will you know exactly where your data is, but you will likely also be getting better service when you need help. - Laurie Head, AIS Network

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Todder,
User Rank: Moderator
5/21/2014 | 6:03:40 PM

Going the way of wireless in Canada

I imagine we're seeing the same synergy in cloud pricing as what the wireless phone industry in Canada is experiencing. The rooted players with multi-product lines discount to crush the competition. The small players will whither, consolidate, fail, or be bought out as market share gathers under the giants.

Cloud has been around forever. You won't see any gov't intervention as we've witnessed in the US for the telcos to divest in hopes of increasing the competitive landscape. What goes around comes around.

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AbeG,
User Rank: Apprentice
5/20/2014 | 5:17:20 PM

Are they really the same product?

I have looked into each of these cloud services and I think that they are different products that appear to be the same. The general impression that I get from cloud services, particularly cloud storage is that it is being used to provide integration of their products, which is sometimes exclusive by design.

For example, Acronis's backup software comes with full support for restoring an entire computer image from the cloud. The catch is that the only cloud storage option that this works with is their own.

Amazon sells music and other digital content which can be delivered to your amazon cloud storage. Although you could store such content on a different cloud drive, the experience is not as smooth and requires a certain degree of technical know-how. Microsoft's OneDrive storage is used to seamlesly sync profile data on Windows 8 computers. Again, one could do this without OneDrive, but it would require considerably more effort.

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dfowlerinu,
User Rank: Strategist
5/15/2014 | 10:35:20 PM

Re: This is a good point

Another analogy is the difference between buying a suit off the rack and getting one taylored specifically for you. In both cases the basic material is the same but the service provides a more valuable solution.

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dfowlerinu,
User Rank: Strategist
5/15/2014 | 10:25:19 PM

Re: Cloud buyers beware

No guarantees. In fact performance is not even guaranteed or even consistent given the noisy neighbor scenarios. Buyer beware, or at least validate, should be the operating model for organizations.

Benchmarking and synthetic transactions are a great way to make sure you are getting what you want.

But remember...Your mileage may vary.

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Mrjspicoli,
User Rank: Apprentice
5/15/2014 | 5:25:18 PM

Nothing new under the sun

The same thing happened to long distance and then to IP transit.

Markets are going to change.

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Charlie Babcock,
User Rank: Author
5/15/2014 | 3:02:28 PM

Cloud buyers beware

Do we have any guarantees as prices are cut that performance levels have remained the same? What if Google and Amazon load more customers onto multi-tenant hosts, then cut prices? Who's winning in that event? There is no common measure of performance across clouds or cloud providers. Nevertheless, the providers know some customers have been smart enough to benchmark their applications and will notice if they're running slower. So far, no one has sent me a complaint.

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Lorna Garey,
User Rank: Author
5/15/2014 | 10:05:18 AM

This is a good point

Imagine if it were ONLY Amazon, or ONLY Google or Microsoft making these huge cuts in an effort to disadvantage competitors that lack the deep pockets to sell at those margins. The other two would be screaming and regulators would be all over this.

I guess it's akin to buying at a local shop vs. Target or Walmart. Are you willing to pay a bit more to get better service, be more than an anonymous customer, and nurture a richer ecosystem? Or do you just want to run in, grab a bulk package of the exact TP you like, and get out fast for short money?

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