This is How You Differentiate the Cloud Costs of Amazon, Microsoft, and Google

If you’re looking to invest in an IaaS service, probably one of your biggest concerns next to functionality is the cost. However, when it comes to comparing the costs of major cloud vendors like Amazon, Microsoft, and Google, it’s not as simple as just seeing the price at the checkout and making your decision. You need to look at other factors, like the size of the virtual machine, type of VM, and contract length, that make up the price tag you’re seeing. If you don’t take into consideration these other factors, you won’t know what you’re really getting (or not getting) for your money.

Knowing Which Deal is Best for You

The first thing you need to understand when comparing cloud vendor costs is that you’re not always comparing apples to apples. Because these services are each very unique, you really need to look at the bigger picture, and not just an ordinary comparison chart. Each category of service the vendor provides needs to be looked at independently, along with the associated costs of each of those services.

Also, keep in mind the vendors often offer discounts or occasional price cuts, which can also make it harder to compare prices. Therefore, you really need to think about what you’re looking for in your cloud vendor so you can know which deal is best for you.

Need help with this? Then take a look at this advice from RightScale regarding this topic:

Don’t Make a Purchase on Demand

A lot of people will only purchase a cloud service when they are in need of some kind of cloud-related emergency. Unfortunately, purchases on demand can cost you more than it should need to cost because typically IaaS services are meant to be manipulated so you can spin resources up and down as needed. If you change your attitude about your cloud service, you could save a lot more money with a long term commitment to one.

Buying Incentives

So, how do you go about making your commitment? Well, in Amazon Web Services, you can use something called Reversed Instances. The longer commitment you make to the contract, the higher the discount. And, if you pay for all of this commitment upfront, the discount is even higher. The discount can range from 24%-75%.

And, Amazon is not the only one to offer these kind of incentives. Google does something called Sustained Usage Discounts (SUD) to help maximize their customer usage of the cloud.

Rightscale recommends that if you have stable requirements, then you should purchase up to 80% or 90% of your VMs as RIs. If your requirements are not as stable, then Rightscale recommends that only 30-50% of your VMs should be RIs, with the remainder on demand.

Rightscale said, “The SUD, which happens automatically and requires no upfront commitment, gives you a discount on each monthly bill based on the percentage of time that instances in a certain family were running during the month.” Therefore, the more you use the VM, the more affordable it will be. For example, if an instance runs for 25% of a month, there is a 20% discount on future use; if it’s running 50% of the month then another 20% discount is applied.

Microsoft, on the other hand, works somewhat on a case by case basis. These are called Enterprise Agreements (EA), which are negotiated with individual customers. So, while they don’t really offer general discounts, those who are willing to commit long term may see some money taken off the total amount of their purchase.

Some Buying Tips

Despite all these tips, it’s still not easy to determine which cloud vendor has the most cost-efficient virtual machines that are best for you. But, there are some general opinions:

If you use a solid-state memory drive, Microsoft Azure has a very cost-effective option. If you don’t need SSDs, then go for Google. And, AWS is said to be the middle-priced option among all three providers. Still, it’s hard to determine which one is actually the best bang for your buck. But, Rightscale notes that when it comes to on-demand pricing, Google has the least-expensive option for VMs.

Additionally, the cost of the vendor also depends on you a lot. Are you running your resources domestically or internationally? Are you able to separate workloads? Because, some providers charge per minute or per hour. There are premiums associated with long term costs as well, so be sure to evaluate the costs when making a longer commitment.

While cost is important, at the end of the day you need to go with the cloud vendor that fits your needs, even if it means paying a little more. Do the math, but ultimately, get what’s best for your company.