Research Firm 451 Sets Cloud Pricing Benchmark

Establishing a cloud pricing benchmark is hard work, given the different configurations, pricing and services across different cloud offerings. 451 Research has attempted to index cloud pricing, creating a benchmark for the hourly price for a typical Web application.

The average hourly price is currently set at $2.56. Average cost for “hyperscalers," a term for the biggest public clouds of Amazon Web Services, Microsoft Azure and Google Compute Engine, is slightly lower at $2.36 per hour.

The benchmark was established through several quotes from cloud providers and establishes a baseline to examine how pricing changes over time. There continues to be aggressive price cuts across the industry, be it with pure-play public clouds like Google and AWS, targeted clouds like ProfitBricks, or big service provider clouds like CenturyLink as only a few examples. The differences between each cloud make for an apples to oranges comparison and the nature of the cuts make it difficult to gauge how much pricing is changing industry-wide.

The benchmark tries to reflect pricing in a real-world situation for a typical application and acts as a measuring stick going forward. Certain clouds still remain better for certain apps and pricing is dependent on specific needs, but the benchmark gives cloud users a starting point for their pricing assessments.

While there appears to be a race to the bottom in pricing for hyperscalers – occasionally pejoratively referred to as commodity cloud – other cloud providers focusing on value adds still need to maintain competitive pricing of the raw resources. The index gives an idea of the pricing disparity.

451 is simplifying its Virtualization Price Index (VPI), which represents the average hourly price of a basic three-tier Web application based on quotes from a range of hosting and cloud service providers. The VPI is currently $0.73 across all providers, whereas the hyperscalers are slightly more expensive at $0.78.

“The current average cost of running a multi-service cloud application is $2.56 per hour, or around $1,850 per month, which includes bandwidth, storage, databases, compute, support and load balancing in a non-geographical resilient configuration,” said Owen Rogers, senior analyst for 451 Research’s Digital Economics unit.

“At this hourly price for an application that potentially could deliver in excess of 100,000 page views per month, it's easy to see how cloud is a compelling proposition for enterprises. Our research indicates that savings of up to 49 percent can be achieved by committing to a minimum usage level, so enterprises should consider alternatives to on-demand if they wish to secure cost savings.”

The CPI is based on cloud quotes from a number of providers – including AWS, Google, Microsoft Azure, Swisscom, Verizon, UpCloud, Gandi, Lunacloud, Internap, Peak10 and Windstream.