Last modified: 10^thApril, 2018

“Organizations need cloud-related services to get onboarded onto public clouds and to transform their operations as they adopt public cloud services. Currently, almost 19 percent of cloud budgets are spent on cloud-related services, such as cloud consulting, implementation, migration and managed services, and Gartner expects that this rate will increase to 28 percent by 2022.” – Gartner1

Quick Links

• What is Public Cloud?
• Who should go for public cloud?
• The state of public cloud in 2018
• Top Public cloud providers
• AWS vs Microsoft Azure vs Google Cloud Platform vs IBM: The features’ comparison
• AWS vs Microsoft Azure vs Google Cloud Platform vs IBM: The public cloud prices’ comparison
  1. AWS cloud pricing reductions
  2. Azure cloud pricing reductions
  3. Google cloud pricing reductions
  4. IBM cloud pricing reductions

The demand for public cloud solutions is rising, and this translates to growing opportunities for public cloud providers. The top public cloud companies are enhancing their services and dropping the prices to better compete in the public cloud market.

What is Public Cloud? back to top

A public cloud, like Azure or AWS or Google, is a multi-tenant service based upon standard model of cloud computing, where a service provider or a third-party provider provides resources, like storage and applications to the general public over a network, like internet.

Users have no control or visibility over the placement of the infrastructure. Services are either free, low cost or are on pay-per-usage model, so no wastage of resources is there. The set-up is easy and almost inexpensive as cost of applications, bandwidth and hardware are covered by the service provider.

It is not possible to select cache, hardware or storage performance (SAS/SATA) in the public cloud. Public cloud provider decides the hardware and network for the user. Also, PCI, SOX or HIPAA compliance cannot be provided in the public cloud as it is a multi-tenant environment, in which the user’s server shares the network devices, storage and hardware with multiple others in the cloud.

It is different from the private and hybrid cloud as private cloud is used by organizations for their own use, and hybrid cloud is a combination of public and private clouds.

The public cloud comprises a broad range of products and services related to cloud, including infrastructure as a service (IaaS), software as a service (SaaS), and platform as a service (PaaS). As per Gartner, the worldwide public cloud services market is projected to grow 17.3 percent in 2019 to total $206.2 billion, up from $175.8 billion in 2018.

Who should go for public cloud? back to top

Public Cloud is the obvious choice for:

• Developers and testers of application codes who fire up and tear down development servers regularly.
• Those who require scalability i.e. capability of adding compute resources at peak times.
• Those doing projects in collaboration with different teams.
• Those running webservers where data security is not a major concern.
• Those who have SaaS (Software as a Service) applications from vendors implementing proper security strategies.
• Those who are using PaaS (Platform as a Service) for doing ad-hoc software development projects.

The state of public cloud in 2019back to top

As per IDC, cloud services will show double digit growth across the globe. It predicts that the US that showed 64% growth in revenue in 2015, will witness a drop of 4% and will account for 60% growth by 2019. Asia Pacific excluding Japan and Latin America will account for public cloud’s highest growth rates in next 5 years.

As per IDC, Greater Cloud Spending will surpass $500B by the year 2020, including SaaS, PaaS, IaaS, and all managed and professional cloud services – public and private, and supporting hardware and software used in cloud implementation as well.

Top Public cloud providers back to top

The public cloud market is majorly dominated by Amazon, Microsoft, IBM and Google. Experts predict that these face competitions only from one another and are not likely to be replaced by any other cloud service provider in the near future atleast. The reason behind it is that competing in public cloud needs very heavy investment, as well as masses of tech talent to support the underlying infrastructure.

Amazon Web Services (AWS) has been leading the public cloud market since it started services in 2006. In July 2017, Synergy Research report of the public cloud providers market share, found that AWS market share now stands at 34%, compared to 11% for Microsoft and 5% for Google. IBM held its market share steady at 8%, thanks primarily to a strong showing in hosted private cloud services.

“While Microsoft Azure and Google Cloud Platform are doubling in size, IBM continues to dominate in hosted private cloud and AWS is still over three times the size of its nearest competitor. Some of the numbers are actually pretty spectacular. The year-on-year market growth rate is nudging down as we expected in such a large market, but it remains at comfortably over 40% and AWS alone generated revenue growth of $1.2 billion over the last four quarters.” – John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group.

However, under the leadership of CEO Satya Nadella, Microsoft is quickly gaining ground, thereby, shortening the gap between AWS and Azure. IBM has also reportedly recovered from the transformational phase and has been experiencing a growth in its revenue due to its cloud, security services and advanced solutions like IBM Watson.

On the other hand, the search engine giant Google too is able to maintain its position in the top public cloud providers list, with its Google Cloud Platform, by introducing discounts and adding features. Google also announced new Network Service Tiers – Premium and Standard to optimize performance and cost of using public cloud.

Amazon, Microsoft and Google provide similar storage solutions but there are a number of differences in features and pricing of their public cloud services, which set them apart from the other. They either drop the prices of cloud instances, offer discounts, drop billing increments, or even provide per second billing options to stay one step ahead of each other.

Gartner named AWS and Microsoft as the leaders in Gartner’s Infrastructure as a Service (IaaS) Magic Quadrant 2017, while keeping IBM and Google among visionaries, following the leaders closely.

AWS vs Microsoft Azure vs Google Cloud Platform vs IBM: The features’ comparison back to top

The comparison of AWS, Azure, and Google Cloud Platform can be done on the basis of features, pricing, and solutions.

AWS vs Microsoft Azure vs Google Cloud Platform vs IBM: The public cloud prices’ comparison back to top

With the maturing of cloud computing, the prices of instances from cloud providers are also witnessing good reductions.

AWS cloud pricing reductions back to top

In addition to reducing prices on a regular basis, AWS also gives options to customers for optimizing their use of AWS. Reserved instances allow Amazon EC2 users for obtaining discounts when compared to on-demand pricing, in addition to capacity reservation when utilized in an Availability Zone.

The price cuts are so frequent that AWS has a blog category dedicated to price reduction!

As per the latest announcement by AWS, effective December 1, 2017 the prices have been reduced for On-Demand and Reserved Instances in Asia Pacific (Mumbai) region as follows:

M4 – Up to 15%.

T2 – Up to 15%.

R4 – Up to 15%.

C4 – Up to 10%.

In May 2017, AWS announced its 61st price reduction. A no upfront payment option with a 1-year term for Standard RIs that was offered previously was changed to a No Upfront payment option with a 3-year term for C4, M4, R4, I3, P2, X1, and T2 Standard Reserved Instances.

Below were the average reductions for No Upfront Reserved Instances and Convertible Reserved Instances for Linux in different representative regions, respectively:

The prices for M4 Linux instances were lowered by up to 7%.

Moreover, AWS now offers per-second billing for EC2 and other services, instead of per-hour billing to make the cloud billing more flexible.

Azure cloud pricing reductions back to top

In addition to reducing prices on a regular basis, AWS also gives options to customers for optimizing their use of AWS. Reserved instances allow Amazon EC2 users for obtaining discounts when compared to on-demand pricing, in addition to capacity reservation when utilized in an Availability Zone.

The price cuts are so frequent that AWS has a blog category dedicated to price reduction!

In order to offer competitive pricing, Microsoft also has been lowering prices on a frequent basis. Microsoft has a price match promise according to which, it has a commitment to match Amazon Web Services prices for commodity services such as compute, storage and bandwidth.

In November 2017, Microsoft made Azure Reserved VM Instances (RIs) generally available on one or three-year term basis, claiming that customers can get up to 72% cost savings over pay-as-you-go pricing.

In May 2017, prices of Dv2 Promo VMs were lowered by up to 7% for Linux VMs and by up

to 5% for Windows VMs. The price reduction in a few representative regions was as follows:

The above price reductions came barely three months after the reductions in February, 2017, when prices of both virtual machines and storage were reduced. Compute optimized instances – F Series were reduced by 24% and General purpose instances – A1 Basic by up to 61%.

The table below shows VM price reductions in UK South.

Azure also offers billing per-second on container instances, for saving money and providing more transparency in billing.

Google cloud pricing reductions back to top

Google Cloud Platform is the cheapest option with it being 60% less expensive for compute as compared to other cloud services for various workloads, with no amount to be paid upfront. It has dropped its prices 3 times in last three years.

It provides per-second billing discounts, sustained usage discounts (SUD) and Committed Use Discount (CUD) to the customers. Custom machine types help customers save up to 50% by matching the needed machine, eliminating over-provisioning and excess payment.

Google has publicly committed to passing along to customers any future price reductions Google achieves through technology-driven advancements in density, scale, power, and cooling. What Google provides is on-demand, real-time pricing. – ESG Labs Whitepaper

In November 2017, Google reduced the price of NVIDIA Tesla GPUs linked to on-demand Google Compute Engine VMs by up to 36%. Lower priced GPUs, along with Custom VM shapes and Sustained Usage Discounts, provide an additional 30% off of instance pricing, allowing customers to run parallel compute tasks on high performance GPUs. Preemptible Local SSDs were also reduced in price by 40 percent as compared to on-demand Local SSDs.

In August 2017, Google announced price cuts on Local solid state disks (SSDs) attached to on-demand Google Compute Engine virtual machines. Lower prices for Local SSDs that are used with Preemptible VM instances were also introduced and were made up to 71% cheaper than before.

Google Compute Engine had provided per second billing from the beginning, but updated its billing model in 2013 to bill instances on per-minute usage. Instances running 10 minutes or less are charged for 10 minutes usage. Following first 10 minutes, per-minute basis usage charges are applicable.

IBM cloud pricing reductions back to top

With the increase in competition, trust in cloud and cloud -native deployment, the market is getting more mature with time, leading to price cuts spiraling to other services linked to VMs, like storage, Database etc.

While last few years saw the leading giants introducing price cuts on storage as it became the next front for competition to grab the bigger cloud market share, experts from 451 Research predict price cuts in relational databases to be the next competitive arena for them.

IBM pioneered this concept, and in March 2017, cut the price of its object storage, with Google, Microsoft and AWS quickly following suit. IBM’s Cloud Object Storage Flex (Flex), works on a “pay as you use” model of storage tiers and potentially lowers the price by 53 percent as compared to AWS S3 IA and 75 percent as compared to Azure GRS Cool Tier.

This leads to an overall reduction in the price of the cloud instance.

Given below are the pricing of AWS, Azure, IBM and Google instances as on January 2017.

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Source:Gartner Forecasts Worldwide Public Cloud Revenue to Grow 17.5 Percent in 2019

Gartner Forecasts Worldwide Public Cloud Revenue to Grow 17.5 Percent in 2019

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Jyotsana Gupta

Jyotsana Gupta - the content and communication head, is an engineer by education and a writer at heart. In technical writing for 8 years, she makes complex topics interesting to general audience. She loves going on long drives in her spare time.

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