Cloud Pricing: What Is a Unit of Cloud Really Worth?

Grazed from MidsizeInsider. Author: Doug Bonderud.

While agility and responsiveness are important factors for any midsize company considering a move to distributed computing, cloud pricing remains the top priority. But in a segmented market where any start-up can purchase servers and start to offer managed services, it is difficult to accurately evaluate cost: What is a unit of the cloud really worth to IT professionals?

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There is no exact date for the birth of public cloud computing though most experts use 2006 as a solid starting point since it marked the first time that cloud deployments were available to companies and consumers at large. Clouds have since struggled through an adolescence riddled with hype and expectation and have finally matured into a stable market with a host of players from technology mainstays to mom-and-pop start-ups capable of providing national and international compute power. The problem, according to a recent eWeek article, is that no one ever sat down and defined how cloud computing should be measured, let alone priced. The result is a market with providers who charge whatever businesses will bear…

Perhaps the simplest standard of measurement is time. A second, minute or hour of compute time can be assigned a value and form the base for all cloud transactions. Unfortunately, it is not that easy. Different providers supply their services in vastly different ways — shared virtual servers versus bare metal clouds, for example — and the performance of these services is not always comparable. Even two CPUs managed by the same company can perform differently depending on load, making the idea of "cloud time" a suspect measurement. The distinction between apps, platforms and infrastructure poses further problems: Does it make more sense for companies to pay a one-time fee for applications on a per-device or per-user model, or should they be charged for each minute an app is in use? What happens if an app fails or is slowed by poor CPU performance? The exchange rate of cloud time seems inherently flexible…

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