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Is Price the Decisive Factor in Choosing Cloud Storage?

By CIOReview | Tuesday, September 27, 2016

Many organizations believe that cloud is the solution to all their IT problems. While migrating to the cloud is a viable option, many aspects need to be taken into account before opting for the cloud. Cloud is popular because it takes away the challenges of managing traditional costs associated with IT – people, power and hardware – and replaces these with simpler ‘utility costs’ measured against consumption.

As major cloud players battle for greater market share in cloud storage, speculations are rife that price for cloud storage services can be the decisive factor. However, pricing is not the only issue that is driving the market. Even after elaborately considering all the aspects related to cloud, pricing can be a difficult proposition to compare across providers. This can lead to unexpected results and prevent organizations from realizing their financial goals.

There are other issues such as security that are of much more importance to the customers. It is not just the cost per gigabyte that one needs to be taken into account; it is about better understanding of the cost implications of activity up front. As large number of businesses look to store immense volume of data in the cloud and minimize IT spending, there is a greater possibility that it may open the door for other companies to opt for cloud.

According to Scott Guthrie, Executive VP, Microsoft’s Cloud and Enterprise Group,“For the most part, we (Azure and AWS) aren’t competing on price. It’s typically we’re competing more in value, I would say at this point. Which is a difference versus, say, two or three years ago, where I think it was more about cost per VM (virtual machine) or cost per storage,” as reported by Dan Richman for GeekWire.

It is well known fact that all cloud computing pricing is derived from against three core IaaS (Infrastructure-as-a-Service) parameters – compute time, storage and network bandwidth. Similarly, the choice of storage should also be a considered one that leads to an effective running of applications. It’s just not possible to predict the exact cloud costs, as many factors come into play and this can lead to unnecessary spending.Cost is not the only factor but one of the factors and companies including startups have started looking for capabilities and features on offer rather than price.

Other important aspects to consider while opting for cloud services are Service Level Agreement (SLA), backups and Disaster Recovery (DR). These options vary considerably across various providers and it’s not a wise choice to make your decision based on assumptions, as this is very different from on-premises solutions. To do this properly and maximize the profit from cloud-based services, one must make the necessary changes before migrating to the cloud to cut down on unnecessary expenses. 

Cloud prices seem to be in a state of perpetual freefall and the trend that we have seen in the last two to three years, it seems will continue. Despite the margins being thin, the intense competition between the leading providers shows no signs of abating. Though the competition is between the major cloud providers, there is also a vast marketplace for smaller providers. Whether this trend will last or not is anyone’s guess, but one thing is for sure that this cost cutting exercise will definitely lure some new customers.