How cloud companies are engaging in price wars
October 1, 2014
Grazed from ComputerWeekly. Author: Clive Longbottom.
As cloud computing becomes more pervasive, the cost seems to be tumbling. This is great news to organisation taking their first steps into using public cloud services – or is it? In many ways, yes it is. Hardware costs are coming down, and modern tools are enabling more cloud functions to be automated, eliminating costs in physically managing the cloud with error-prone humans.
Software to layer on top of the infrastructure is either open source, where only support costs need to be covered, or commercial, where suppliers are finally figuring out that new, more flexible pricing models are required. So, as the cost of the platform itself falls, it is only to be expected that a massively competitive market, such as the cloud, passes on some of those savings to its prospective customers…
However, this race to be seen as the provider of cheapest cloud services has its perils. Some cloud providers do not have the economies of scale to be able to buy hardware or tools at the same price as a much larger competitor. Therefore, to be cost competitive, savings have to come from other places…
Read more from the source @ http://www.computerweekly.com/feature/Cloud-price-wars-Show-me-the-money