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Trick or Treat? The Hyperscale Public Cloud Pricing Model

Oct 24, 2019, 22:20 PM by Alex Simons

Trick or Treat The Public Cloud Pricing Model

Image: Disney

“Something is missing. But what?!?”

This was the Pumpkin King, Jack Skellington, moaning in The Nightmare Before Christmas after he underestimated the resources required to ruin Christmas. Jack had just kidnapped Santa Claus – a critical first step to wreak havoc on Christmas Town – but needed much more than a stolen outfit for a comprehensive raid.

Jack’s plot was ultimately spoiled when Santa escaped from “Oogie Boogey’s Lair” – an under-provisioned cold storage repository managed by a gambling-addicted boogeyman. Poor Jack should never had trusted the unreliable nature of this infrastructure with a mission-critical asset like Santa Claus.

Many IT admins indirectly face a similar challenge when developing an off-site backup solution for their corporate systems and applications. A hyperscale public cloud environment may seem like the most affordable option to keep pace with exponential data growth. But how do you properly provision the general-purpose cloud infrastructure to support the complex requirements of your backup policy?

Plus, understanding the hyperscale public cloud billing model might seem more complicated than The Gauss Law for Electromagnetism. These confusing billing practices are designed to monetize off cheap upfront storage costs through a variety of “hidden charges” based on cloud usage patterns. These hidden charges often increase the variance between the anticipated and actual cost of the backup solution due to the customization of backup intervals, change rates, and retrieval fees.

So this begs the question – is the hyperscale public cloud pricing model a “Trick or Treat” for off-site backup solutions?

Let’s take a look.

Oh – and Happy Halloween from KeepItSafe!

Trick or Treat: Low Upfront Storage Costs

Forecasting storage costs is an overly complex exercise and the size of your backup workloads will depend on a wide range of variables.

But the cheap upfront storage repositories are utilized as an incentive to attract new users – many of which are unaware of a significantly higher total cost of ownership (TCO).

So sure – the hyperscale public cloud providers will win the race to bottom with pennies-per-gig cold storage repositories. But cloud storage is not synonymous with cloud backup. The replication of snapshots to a secondary hyperscaled facility is not a high-uptime data availability strategy.

Hyperscale public cloud users also need to provision their solutions to align cloud resources with solution requirements. The cloud provisioning process can leverage different delivery models depending on the solution architecture. But provisioning a hyperscaled public cloud environment will inevitably lead to hidden charges within one of the following categories:

  • Over-Provisioning: Many IT admins overestimate the requirements for their systems and applications. This makes it easy to increase capacity, max out virtual resources, and over-inflate the cloud environment.
  • Under-Provisioning: This category is easier to detect as it implies the solution performance is unacceptable. These solutions aren’t powered by the necessary computing power to facilitate tight recovery windows – leading to a higher cost of downtime.

Oogie Boogie was incapable of imprisoning Santa Claus due to the under-provisioned entrapment facility. Jack needed an Infrastructure-as-a-Service (IaaS) provider with the security safeguards to properly ensnare his hostage and annihilate Christmas.

Trick or Treat: Network Egress

Network egress describes the movement of data across different environments. This is a regular component to daily cloud backup operations and hyperscale public cloud providers charge for the usage.

The “pay-per-use” business model has plenty of advantages if the billing systems are transparent and easy to calculate. But the complexities involved with tracking detailed egress usage further complicates the administration and maintenance of a hyperscaled backup solution. This is why enterprise software and cloud pricing models skew towards a subscription format with the licensing, installation, and on-going maintenance packaged together.

The hyperscale public cloud business model also leverages these egress fees to achieve vendor lock-in. Network egress significantly reduces data portability and heightens the barriers to exit by charging to migrate data out of their clouds.

So while the low upfront storage costs are often driving the decision making process to migrate into a hyperscale public cloud environment – they are mostly negated by the sizable hidden charges associated with changing environments.

Trick or Treat: Perceived Simplicity

IT departments often prefers to receive a single bill from one provider rather than several bills from different providers. But just because a hyperscale public cloud provider like Amazon offers every IT service on the planet – there is no guarantee of simplicity.

Different cloud service providers will specialize in different capabilities. The easiest pathway to an enterprise-caliber cloud backup solution is to leverage a custom Cloud Service Provider (CSP) with an existing network of cloud environments purpose-built for backup and disaster recovery. This alleviates the complex provisioning requirements through enhanced solution customization.

Technical support is also a major concern for the hyperscale public cloud providers. Their profit model hinges on the DIY nature of their environment. So the fewer resources allocated for technical support and customer success – the higher the margins.

Developing a comprehensive cloud backup solution requires expertise, time, and IT resources (CAPEX and OPEX). So technical support is often a key differentiator between clouds if the CSP can simplify the development process.

Trick or Treat: Hyperscale Flexibility

Hyperscale public cloud providers often use the terms flexibility and scalability interchangeability. But unlimited storage capacity does not always translate into flexible cloud architecture powered by automation.

Different applications will have different requirements. So implementing a singular cloud environment to service each IT workflow can actually decrease the cloud flexibility through the data silo effect.

A multi-cloud strategy is a better alternative to bolster flexibility by assigning the best-fit cloud environment based on the desired business outcome. This enables freedom of choice between different cloud service providers specializing in different IT requirements.

The multi-cloud deployment model also alleviates budget constraints by offering a range of different CSP pricing models. Multi-cloud adopters are not stuck with paying for a less-than-stellar backup service just because they’d like to stick with a single cloud provider.

The hyperscale public cloud providers offer a wide range of valuable services - many of which are a logical choice for your IT environment. But the notion of increased hyperscaled flexibility is often utilized as a trick to maximize the lifetime value of their customers.

This Halloween: Check Out the Treats at KeepItSafe

So the hyperscale public cloud pricing model isn’t necessarily a trick or treat. The structure works well for some cloud workloads.

But it’s probably not the best option if you value business agility and tight recovery windows.

If you're interested in taking a deeper dive into the hyperscale public cloud pricing model, we invite you to check out The 7 Hidden Costs of Cloud Backup or schedule a solution consultation with a KeepItSafe cloud adviser today.

KeepItSafe is not affiliated with Touchstone Pictures, Skellington Productions, Walt Disney Pictures or Buena Vista Pictures.

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