Sunday, February 20, 2011

The unbearable lightness of being: Trying to know in advance how much a cloud service costs

“Sometimes you make up your mind about something without knowing why,
and your decision persists by the power of inertia.
Every year it gets harder to change.”
Milan Kundera, The Unbearable Lightness of Being

From Huan Liu’s Blog  we found some revealing cost comparisons of Terremark, RackSpace and GoGrid versus Amazon EC2. There are various sources for this type analyses that convey a deceiving first impression that making cloud cost comparisons is easy, It is not, Most providers made it a rocket science.

The Rackspace cost comparison with Amazon EC2 entry is from January 25, 2011. Interesting RackSpace and GoGrid charge only for RAM and not for CPU, as the CPU is shared proportional to the memory it uses. Did you know this? I didn’t. So if you use little RAM 1.5 GB, the ratio of the RackSpace Cost / EC2 cost is 17% at low RAM and it jumps 191% if the one selects 16Mb.

RackSpace was and still is a hosting provider like the wolf from the Little Red Riding Hood They attract subscribers to their cloud, then when a serious usage occur, the prices jump double the costs of the 100% cloud providers. This is natural, as RackSpace, same as Go Grid, cannot offer competitive cloud prices, unless they erode their own co-location and hosting customer base.

Another entry in this blog, Comparing Cloud Providers on VM Cost  shows RackSpace and Terremark cost ratios with an equivalent EC2 cost from 17% to 50% ONLY when the memory usage is low (0.25 GB to 1.5 GB maximum).

Terremark cost comparison with Amazon EC2 has in some cases (high RAM versus minimum CPU allocated) cost up to 3x to 5x the EC2 costs. GoGrid has similar prices as EC2 at low RAM, but it jumps 4x in high ram configurations.



 The above data prove clearly three bullets
  •          Former hosting providers converted to cloud providers have an intrinsic obstacle of bringing competitive cloud offerings, as they could erode their lucrative hosting business
  •          The $25 million in cloud revenues  minimum requirement for admission to Gartner's  Magic Quadrant for Cloud Infrastructure as a Service is not fair. It is virtually impossible to discern how much income GoGrid, RackSpace and Terremark have from cloud versus hosting services
  •      It is  sad how little transparency most cloud and hosting companies offer to predict a budget.
Amazon EC2 so called simple monthly  calculator to predict billing is nothing by simple. You have to know Number of Elastic IPs, Elastic IP Non-attached Time, Number of Elastic LB, Data Transfers In and Out, Regional Data Transfers, and so on and on and on. And this is just EC2. Then you have to know CloudWatch, in case you use it, asking  again details I have no idea, because as an advance estimator, I supposedly do did not use AWS before. As most people, I blush to admit that I do not know how to write an AMI (along with 95% of the people using AWS who are not developers).

Wednesday, February 09, 2011

Cloud IaaS providers; Survey Results.


Here are the results of the survey Tell us your preferences: Cloud IaaS providers
 The following IaaS providers were considered:
  1. Amazon Web Services (AWS)
  2. RackSpace
  3. GoGrid
  4. Savvis
  5. Joyent
  6. CloudSigma
  7. NaviSite
  8. Google Apps
  9. Microsoft Azure
  10. SoftLayer
  11. Terremark
  12. Private Clouds option
 My comments are below each picture. Feel free to add your comments

 Most respondents are familiar with public cloud. 30 out 34 respondents to the question above are cloud users , some for as long as three years.


Most prefer public IaaS providers who do not use proprietary PaaS. Only 18% like the idea of IaaS plus provider proprietary PaaS (best known example are AWS, Google Apps and Microsoft Azure).  56% prefer pure IaaS providers who may offer 3rd party PasS


As expected, AWS is a clear popularity leader.  80% of the respondents know how to use their site or want to learn how to use it. Google Apps is a second place with 60%, based on the same metric, although there are more people knowing how to use RackSpace (#3  ranking).


Here we rank IasS providers who either are a customer or expressed interest to become customers short (6 months) and long term. AWS is #1  leader, followed by Google Apps, Rack Space and Microsoft Azure. Ranking #5 are the group that prefers to have a private cloud (in orange).

Maybe this survey is filled in by a sample representing public cloud users. There is not representative, But the private cloud advocates are a smaller pie than we thought. One inference is perhaps, once one has a good experience with a public provider, there is less propensity to consider the private cloud alternative.


This is an "inglorious" list of how many do NOT want to consider a particular IaaS provider. The most startling discovery is to see Microsoft Azure the least considered provider. The other IaaS  with high "inglorious" rating (GoGrid, Savvis, Terremark) are really perceived as hosting companies and they  must increase their PR and awareness marketing as cloud providers.


The price one pays as leader , if that also has the high number of customers leaving. The absolute numbers are not relevant, as the percentages of those leaving versus new customers would be a better indicator . Rack Space and Amazon had the largest numbers. Surprisingly we see Joyent loosing as many customers as Amazon. One way is to dismiss this chart as unreliable, not enough data, etc.  This  will be not the responsible thing to do. Sure, we may have too few respondents in this survey, but what if we discover something that can be rectified, and investigating further?

Savvis  has no records of loosing customers. My final take away are are:

  • In spite of the preference for IaaS providers with no proprietary  PaaS, the market is dominated by proprietary PaaS IaaS (AWS, RackSpace, Google Apps) Yet  Microsoft Azure failed to gain acceptance
  • Newer players started from ground up to provide cloud IaaS do much better than established co-location and hosting companies re-focused in providing cloud services.  
  • As a an entry point to the Magic Quadrant  of Gartner, an IaaS provider must show minimum  $25M in revenues. It is not clear in the case of case of most hosting companies, including Terremark (recently acquired by Verizon for $1.4B) what segment from their revenues comes from IaaS Cloud Services, Their popularity is not proportional with their valuations.
We read in the Verizon news of Terremark acquisition, that other IaaS companies as potential take over:  Savvis, GoGrid and others with a big hosting operations. The gold lies in the soft technologies of the new IaaS providers such as Joyent , and  others, not considered in this survey.

Otherwise, when the acquisition ecstasy is over, the big telecoms might discover they just bought real estate, bricks and legacy hardware.

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