Fixed Cloud Cost Server
|Table of contents|
|Pricing Models in Cloud Computing|
|Advantages of a Fixed Cost Server|
|Demerits of Pay Per Use Cloud Server|
|Vendor Lock – Makes the Cloud Migration Difficult|
|Causes of Overspending on Public Cloud|
It’s been more than a decade since cloud computing made its entrance into the IT industry. Since then cloud computing has made its grip in the market showing a significant growth. In 2020, enterprise spending on cloud infrastructure services was 130 billion U.S dollars, this growth has been more than 30% when compared to the previous year. However many of the big enterprises are getting large unexpected bills that you receive after the consumption of too much cloud. Some of the pay per use cloud customers are moving to a fixed cost cloud model, to avoid any surprises in the billing
It’s been more than a decade since cloud computing made its entrance into the IT industry. Since then cloud computing has made its grip in the market showing a significant growth. In 2020, enterprise spending on cloud infrastructure services was 130 billion U.S dollars, this growth has been more than 30% when compared to the previous year. However many of the big enterprises are getting large unexpected bills that you receive after the consumption of too much cloud. Some of the pay per use cloud customers are moving to a fixed cost cloud model, to avoid any surprises in the billing.
Even many large enterprise customers are struggling not knowing how to tackle the ever growing cloud cost. On one hand, ever growing cloud billing and on another hand huge amounts of salary needed to maintain the cloud infrastructure.
Pricing Models in Cloud Computing
There are many types of pricing models which are used on the cloud server, however it can be classified into two main types: Fixed Pricing Model and Dynamic Pricing Model.
Fixed Pricing Model – This is the favorite cloud pricing model for CFO or the finance team, they would like to have a good amount of fixed cost every month, rather than varying amount of billing for your cloud infrastructure. This type of pricing model makes the users aware of the cost implemented while doing the business mainly they will know how much they will be spending according to the resource they use. This type of pricing model is consistent for a longer period of time. This type of pricing model gives assurance to the customer moreover it gives simple profit estimation. For large enterprises the billing cost of the cloud can run into a few million dollars or for some small companies it could be a few 1000s of dollars. What if the billing suddenly increases every month?
Dynamic Pricing Model (Pay per use model) – This type of pricing model can also be called the real time pricing model. This type of pricing model is calculated based on the amount of resources such as RAM, CPU, Disk, Bandwidth used. This type of pricing model has lots of advantages and also some disadvantages, mostly many companies end up paying huge cost to the cloud in this model IF NOT properly optimised and utilised.
Advantages of a Fixed Cost Server:
Fixed cost is better for small company Easy to plan your budget No Worries about what could be the billing per month Pay once in a year with better discounts and offers\ NO surprise invoice & billing No Worries of Accidental Misuse
Demerits of Pay Per Use Cloud Server
Ease of Consumption
Many of the cloud providers make it easy to set up the accounts and consume the services. Hence many of the enterprises take the services and launch it without knowing the outcomes. Hence they keep on consuming the resources without knowing if it is really required or not. As a result the cloud bills keep on skyrocketing.
Not only is there an ease of consuming the services but there is a risk of setting up the workload and then forgetting to shut it down once it is not required. Hence in this case you might forget how many unattached databases or idle virtual servers are there currently in the public cloud.
Unpredictable Cloud Costs
Another fundamental cost challenge is the unpredictability of the cost of services as it changes constantly. Rates of everything from data overage to serverless function execution time can change and increase without any prior notice from the provider. Things can get worse and more complicated as the pricing details can vary between the different cloud providers. In this case, the price of the same service might remain unchanged in one region but it can change in the other region. As a result, even if you are trying hard to plan for the cloud computing costs ahead of time, predicting the cloud cost is nearly impossible.
The level of security
Secrecy and protection are among the most uncertain items in cloud computing. Utilizing a cloud computing system means we are fully authorized with the security and confidentiality of data to businesses that deliver cloud computing servers. When you encounter an issue, you cannot sue the server for mistakes in the data.
Cost of Data Transfer
It isn’t much you can do in the public cloud if there isn’t any data stored in it. Unfortunately, there are many hidden costs that come out with the data. One of the reasons is you have to pay each time you transfer the data within the cloud. This makes the bill more unpredictable. Another reason is called data gravity, this term says that if you have more data in the public cloud there are more chances that you use up those services using the data. The extra services you take comes up with a cost, which is billed in addition to the various data storage and the transfer fees which are described.
Hackers or Miners can increase your billing cost
If your website is hacked or any one of your cloud instances’ security is exposed, then hackers or any malicious users can take advantage of all the cloud instances in your account and increase your billing to a large extent.
Huge Managed Support Cost
If you choose a pay per use server you have to pay a huge amount for the support. This can bring a huge increase in your monthly billing.
Here is a snapshot of AWS’s pricing for support:
- Developer: $29/monthBilling
- Business: Greater of $100 – or –
10% of monthly AWS usage for the first $0–$10K
7% of monthly AWS usage from $10K–$80K
5% of monthly AWS usage from $80K–$250K
3% of monthly AWS usage over $250K
- Enterprise: Greater of $15,000 – or –
10% of monthly AWS usage for the first $0–$150K
7% of monthly AWS usage from $150K–$500K
5% of monthly AWS usage from $500K–$1M
3% of monthly AWS usage over $1M
Vendor Lock – Makes the Cloud Migration Difficult
Vendor lock-in is a situation where an enterprise won’t be able to switch to a different vendor and will be stuck to a particular cloud vendor. There are many concerns related to a vendor lock some of them are discussed below:
- If the quality of the vendor or the provider declines or if it never meets the desired results the client will be stuck with services.
- If the cloud provider makes drastic changes in a way that they don’t require it anymore then the customer would be stuck in it.
- A big problem can arise if the cloud provider closes their business altogether.
- There are few providers who increase their service rates drastically knowing that the clients are already locked in.
How can Enterprises avoid vendor lock-in?
Evaluating the Cloud Services – Before opting for any services companies should thoroughly research the service provider before making any commitment. Hence the client should always have the proof of concept deployment before making sure that the level of service is sufficient.
Ensuring the data can be moved easily – Companies utilizing the cloud services should always ensure that the data they use is always portable and easy to move from one environment to another. They can enable this by defining the data models as well as by keeping the data in formats which can be used on a variety of platforms.
Keeping a Backup – By keeping the backup enterprises can always be ready to host the data to the respective service provider.
Complications Using a Pay Per Use Cloud Server
Close the Services – There are many big cloud service providers who are not always good to their customers. Suppose if you are charged more for the service you receive without your knowledge and if you contact them, there is a chance that you will be at the mercy of their accounting department. If you are not happy with their verdict there is nothing you can do. Either you have to pay the hefty amount or they will just cut off the services without any notice.
Be Ready with the Data – If you have been charged more for your services and if you need to find out the reason behind it it can take a lot of time. By the time you get all the information and data, the verdict would have already been announced. Hence it is important to make sure that you have all the information on how and why you were charged so much. There is a chance that the service provider might ask to delete the instances related to the billing making it difficult for the user to extract the logs.
Open-Ended Billing Model – The Pay per use billing model by many providers is open-ended, which means once the billing is done there isn’t much that can be done. You and your company can lead into a huge amount of debt in a matter of just one day.
Complex billing algorithms – The pay per use model needs continuous monitoring. If it is not taken care off properly then billing can reach sky high. Only an experienced developer or a person with system wide knowledge can handle the usage of the server.
Costly in comparison to others – If you will check most of the pay per use cloud providers are expensive when compared to a Fixed cost cloud server. In a fixed cost cloud you can choose the package according to your convenience and then shift if the resource requirements are increased.
Climbing Cloud Costs
As the enterprises’ IT spend is increasing, many of them get in shock when the monthly bill increases rapidly. The main reason is cloud mismanagement which leads to a significant change.
Causes of Overspending on Public Cloud
Forecasting inaccurately results in the purchasing of the highly discounted reserved capacity which is usually paid in advance. The shift of the applications without refactoring leads to wasteful resource consumption not implementing the auto-scaling solutions correctly.
So What is the Solution?
Hence it is always better to choose a fixed-cost cloud solution service. This will give you a better grip over resource utilization. If you choose our services you will be provided with free migration from any other service provider with many add ons like unlimited bandwidth.
Advantages of our fixed cost cloud
- You get fully managed support for all the cloud instances including database
- Fixed cost and not increasing every month
- At an attractive price, far less than what you pay for any other cloud service providers