Tag Archives: industry analyst

  • Cloud Pricing Taboos

    Cloud Computing looks to be making the transition from a development and test option to a primary considerations for many businesses, but many are finding the pricing models and options overwhelming and complicated to figure out.

    In the fall of 2014, 451 Research released a report at their Hosting & Cloud Transformation Summit that included information about the top cloud computing-related pain points, which pricing/budget/cost rated as the number two pain point on that list behind security.

    How does an organization determine the best cost for their environment, what should they buy, what cloud providers should they consider. Regardless of the fact that Google, AWS and Microsoft appear to be playing the pricing battle to try and win the title of lowest priced public cloud offering, cloud computing decisions are no longer based just on price. IT leaders are looking at a variety of criteria in their decision making process, and are looking for processes, tools and ideas to simplify this challenge for them.

    Tale of Two Approaches

    Our data shows that most organizations could be saving an average of 66% on their IaaS infrastructure by simply gathering performance data from their infrastructure and making decisions on application and workload usage vs. using an inventory approach (buying exactly what you have in the data center in the cloud). Then we have reserved capacity vs. on-demand capacity in AWS, which can cause some IT buyers a little anxiety.

    We recommend for anyone moving to AWS for the first time or for a new application to purchase On-Demand instances to see how your application runs in AWS, and then if you are happy with the results than you can consider buying reserved instances.

    Something to consider when buying reserved versus on-demand; you are committing to a 1 year or 3 year term when buying reserved instances, which can have a 30-50+% savings over on-demand pricing, but you are stuck with the hardware characteristics of that instance. What does this mean? When you buy reserved capacity you are buying specific technology that you will run your application for the next year or three years, with no upgrade options. In some cases, organizations have purchased reserved instances of a specific hardware type, and a month later AWS lowers the price on their newer hardware technology, but you are stuck at a higher price on older technology.

    If your use case is suitable for that option, and it is the right fit for your business, then go with that option. But if your application is of dynamic nature and you need better performance on newer hardware technology throughout the year or over the next three years, than on-demand pricing may make the most sense for your organization.

    Most of these issues are addressed specifically to AWS, but Microsoft has developed their model to align with AWS. Microsoft has pledged to stay comparable with AWS with respect to pricing. Do not assume that AWS or Microsoft are going to be the best option for price for your business, we see situations where AWS and Microsoft are not necessarily the best price for larger instances. In cloud we are not paying for what we use, we are paying for what we reserve, and in some cases we are paying too much.

     Network I/O and Percentage of Daily Cost

    We looked at 148 of our clients and looked at just network I/O, let’s talk about the percentage of daily cost. If you take network I/O and you are going to spend $10 a day on a cloud server, based on your network usage, what percentage of that cost is made up of network I/O?

    Our analysis showed that most organizations saw less than 25% of their cost of cloud was made up of network I/O. In some cases the network I/O of a particular server can make up 50-75% of the total daily cost of a server running in cloud. In 2% of the cases we evaluated, organizations had servers/workloads that network would make up greater than 75% of the total cost of running that server in the cloud.

    If you have large database servers with data replication and high network communication to those applications, the cost of running those applications in the cloud may be prohibitive. We believe that before you can truly determine if the cloud is the right place for your application, you should complete a thorough readiness assessment of each application and their dependent workloads. Know before you go!

    Keys to Success with Cloud Pricing

    How can you be prepared when moving to public infrastructure-as-a-Service, you need to make sure you do not overbuy from a capacity standpoint.

    1. General Usage information for CPU, Memory and Disk I/O – You need to have a clear picture of the workloads you plan to move to cloud, and this includes CPU, Memory, and Disk I/O to ensure you are not going to over pay capacity.
    2. Current network usage and impact on performance – Including network usage when planning cloud cost models is critical. In some cases, your servers network I/O may make up 75% of the total cost of moving to cloud. It would be great to know this in advance.
    3. Application dependency mapping – Prior to pricing out your cloud implementation, it is important to understand all of the associated dependent workloads that may have to be moved with your application. It is much easier to price an application stack than pricing individual workloads.

    The great thing about IT today is that organizations have plenty of choices of where and how to run their applications. The problem is that with a ton of choices, it also makes selecting the best option for your business.

    We recommend that prior to selecting a cloud provider, you should have a clear picture of your entire environment, including full application dependency visualization for each application and a full communication density map of all of your host and client connections. Don’t make the mistake that plenty of organizations have made before you, it could save you hundreds of thousands each year in unnecessary cloud cost.

    The post Chapter 4: Cloud Pricing Taboos appeared first on RISC Networks.

  • 451 Research Report on RISC Networks

    Earlier this week, Mr. Owen Rogers of 451 Research released a report on our company, titled RISC Networks aims to help its partners act as trusted cloud advisors, this is the second report Mr. Rogers has written about RISC Networks. It is great to see the analyst community see the values that our products can contribute to the partner community.

    This report indicates that ninety-nine percent of our revenue comes from our partners, which is primarily because our assessment and analytics platform is designed for system integrators, managed service providers, cloud providers and technology providers like Cisco Systems, HP, VMware and others like them. We launched our Cloudscape product to market earlier this year, but are finding that although the benefits span from the systems integrator through to the IT organization at their client, it is best situated for SI’s, Cloud Providers and Data Center providers.

    Mr. Rogers stated in his report “by embedding cloud-assessment tools within enterprises, CIOs can assess their options on an ongoing basis, taking into account different workloads, applications, cloud providers and cost benefits”. We believe our partners and future partners can add a tremendous value to their clients by giving these medium to large enterprises a clear picture of their current environment and to help them identify ideal candidates for cloud and/or data center moves.

    The RISC Networks technology offers much more than the traditional network or cloud assessment, many of our current clients and partners have said things such as “the RISC Networks cloud assessment delivered us more information than we have ever before and will help us execute our cloud strategy”. Our platforms ability to compare and model cloud provider pricing using the clients existing infrastructure usage and performance, build models for data center implementations, map applications dependencies using netstat and network flow data, build a network impact analysis for cloud moves, construct cloud migration move groups and plans, and much more is entirely unique in the industry.

    We tend to agree with Mr. Rogers comment “With partners, customers, revenue and profits, RISC seems to be onto something good”. Moving into 2015, our partners and clients will see some amazing changes that will strengthen our relationships with our existing partners and open up a lot of opportunity with new partners.We continue to develop our assessment and analytics technology in network infrastructure, data center, and cloud computing areas, because those are the areas that we see our partners needed the most assistance with. /p>

    If you are a systems integrator, cloud provider, data center operator, managed service provider or technology provider (Dell, HP, Lenovo, VMware, Cisco, etc.), I would encourage you to check out Mr. Rogers report and go to our CloudScape page.

    The post 451 Research Report on RISC Networks appeared first on RISC Networks.