The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers

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1 The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers

2 TABLE OF CONTENTS Executive Summary:...3 Part 1: The Current State of Cloud Computing IaaS Pricing and Packaging...3 Part 2: Definitions...4 Part 3: Understanding the components that make up an IaaS Cloud Service...4 Comparing Cloud Computing CPU...4 Comparing Cloud Computing RAM...5 Comparing Cloud Computing Storage...6 Comparing Cloud Computing Bandwidth...8 Comparing Cloud Computing Private Networks...8 Comparing Cloud Computing Customer Support Costs... 1 Part 4: Overview of Configurations...11 Part 5: Other Considerations Understanding Price-Performance In the Cloud Pricing Schemes PART 6: Conclusion The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 2 of 17

3 EXECUTIVE SUMMARY: Cloud Computing is a rapidly growing and evolving IT delivery model that is replacing IT deployments that have traditionally been in on-premise or in corporate co-location facilities with dedicated physical servers or managed hosting environments. We are in the early stages of this 15 year IT cycle and many of the first offerings from the first generation of providers have created a pricing and packaging model that have held to 213. These early offerings have proven popular, but create numerous problems for Cloud buyers (Technical Teams, Business Unit Managers, Financial Teams etc.) as they try to compare providers and understand how to get the best price/performance for their budget dollars. Most providers force Cloud buyers to buy resources they don t need or can t use like temporary disk storage, or more CPU power in order to obtain the right amount of RAM. Many of these problems stem from providers that were designed around legacy architectures, which is why we see such dramatic performance and cost differences among providers. Our goal with this white paper is to educate your team on the components of a Cloud Computing IaaS service and how to consider each component in a comparison among providers. You ll learn how you can save more than 4% on your Cloud computing IaaS service and achieve a level of performance significantly higher than the 1st generation of services. PART 1: THE CURRENT STATE OF CLOUD COMPUTING IAAS PRICING AND PACKAGING Comparing Cloud Computing Infrastructure as a Service (IaaS) pricing is a complex task. Since its emergence, packaging and pricing have been incredibly diverse among the different providers. If each provider packages their compute, storage and networking services differently, it becomes a challenge for cloud buyers, CFOs and operations teams to understand the factors that make up their charges. Many factors have led to this situation, including the fast moving nature of the industry, its competitive nature and quite simply a lack of transparency leaving the onus on the cloud provider to learn the lingo and read the fine print. The situation is so bad that a cottage industry has sprung up of companies that offer cost calculators that attempt to demystify pricing for potential or actual workloads. Cloud users are willing to pay for a service that helps them understand their billing! This paper will help you, the cloud buyer, learn some of the key definitions of what makes up an IaaS service and how to leverage this knowledge to compare providers and ultimately come up with a solution that meets both performance and budget requirements. The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 3 of 17

4 PART 2: DEFINITIONS Before we dive in, please take note of the following definitions. Bandwidth the amount of data that can be transferred over a network, either between servers and storage, or inbound and outbound to the Internet. Billing Cycle and Term the time increments Cloud Computing providers use to calculate usage. Most often usage is calculated by the minute, hour, or month. Contracts are pay as you go, quarterly, semi-annually,1 year, 2 years, or 3 years. Block Storage Unlike ephemeral storage block storage is not temporary storage. If the virtual server it is attached to is restarted, or switched off, the data on the block storage device will remain. Note: some providers include block storage with all servers, others do not. Also, some block storage has built in redundancy, and others do not. Configuration the amount of CPU, RAM, and storage in a virtual server, virtual machine (VM) or Cloud server or instance. CPU Can refer to virtual CPU (vcpu), virtual CPU core, dedicated CPU core, or provider specific definitions like an ECU. Disk I/O refers to input and output operations from server to storage. Disk IOPS input/output operations per second. Used as a performance metric to measure disk speed. Ephemeral/Temporary/Scratch Storage It goes by many names but whether it s called ephemeral, temporary, or scratch, this is the default storage that comes with most cloud computing virtual servers is not designed for data. It s usually used to run the virtual server s operating system. Firewall controls incoming and outgoing traffic by blocking unauthorized connections. Can be hardware or software based. Configuration Granularity Some providers offer virtual servers with independently customizable increments of CPU power (by individual units), RAM (by individual GB), or storage size when customizing a VM. Independently Customizable Virtual Servers (aka Virtual Machines (VM), Cloud Servers, Instances) Similar to configuration granularity this refers to flexible configuration sizing, where the amount of CPU, RAM and storage can each be customized independently of one another (as much as the provider allows see Configuration Granularity). For example, with certain providers Cloud buyers must simply select among small, medium or large virtual server sizes with some additional increments in CPU, RAM and storage within those virtual server sizes. Load Balancer Distributes requests and workload among multiple machines to optimize efficiency. Can be hardware or software based. Pre-Packaged VMs refers to cookie-cutter configuration tiers, where there is no room for customization. For example providers like Amazon EC2 and Cloud offer only instance plans with a preset amount of CPU, RAM and storage; each resource is not independently configurable. PART 3: UNDERSTANDING THE COMPONENTS THAT MAKE UP AN IAAS CLOUD SERVICE Now that we have these definitions out of the way, let s review the components that make up a cloud computing environment. We ll look at how providers define and package CPUs, RAM, Storage, Bandwidth and Private networks. All of these components are the building blocks that make Infrastructure as a Service the foundation of Cloud Computing services. COMPARING CLOUD COMPUTING CPU At the core of every virtual server is the CPU or Central Processing Unit. Unlike physical servers or leased dedicated servers, where there is a CPU that has a model number and performance rating by a vendor like Intel or AMD, however with Cloud computing services the CPU component does not have a standard definition. Each provider has its own way of measuring and packaging processing power and there is no cloud industry standard. Take a look at the table below for examples of these variations: The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 4 of 17

5 Provider Measurement Shared/Dedicated CPU resources Notes Amazon EC2 vcpu/ecu Shared A certain number of ECUs come with each virtual core Physical Core Dedicated Dedicated physical core Cloud vcpu Shared Measured in CPU cycles As the table above highlights, some Cloud providers offer shared CPUs, while others provide processing power that is dedicated to your needs. While in many cases, the CPU remains idle or has low utilization much of the time, shared CPUs are subject to the threat of a noisy neighbor effect, defined as another VM on the same physical server monopolizing CPU compute resources. If this is a concern, dedicated CPU resources may provide more consistent performance. Cloud services offering dedicated physical cores make it much easier to measure and predict performance and meet workload requirements. When different providers virtualize their CPU cores in different ways, it makes finding the right amount of CPU for a particular application difficult. The variability and inconsistent performance that shared CPUs exhibit further complicates the performance predictability. Many providers post disclaimers to the effect of depending on the profile of the physical host, your CPU allocation may vary. COMPARING CLOUD COMPUTING RAM Like CPUs, Random Access Memory or RAM is an essential building block of a virtual server. Applications and databases use RAM to store instructions and data, because RAM is much faster than disk enabling the CPU to perform tasks without going to disk. And now, with the rise in popularity of in-memory databases, cloud buyers often seek VMs with large amounts of memory. By avoiding writes to disk, in-memory databases offer faster and more predictable performance, fulfilling the needs of real-time data processing in ways that traditional approaches cannot meet. With the power of modern processors, many IT operations teams and database architects believe that the RAM is the bottleneck, i.e., more RAM means faster processing. Like the CPU feature some cloud providers offer only pre-packaged Cloud server configurations offer fixed amounts of RAM or pre-set CPU/RAM ratios in pre-packaged VMs. In contrast, other cloud providers offer independently customizable attributes. Because RAM is so central to the performance of a virtual server, many Cloud buyers often have to choose higher quantities of CPU, to obtain higher amounts of RAM. Some consequences of pre-packaged VMs include, requiring unnecessary resources and charging more than is necessary to achieve a adequate level of performance. With independently customizable VMs, RAM allocations can be very large with CPU and disk levels as low as you need them to be, saving money. Cloud buyers should look at this example of how targeting a specific amount of RAM (24GB) can force you to purchase more CPU than is needed. The table below compares some pre-packaged and independently configurable VMs available with a minimum of 24GB of RAM: The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 5 of 17

6 Provider vcpu RAM (GB) Disk (GB) Amazon EC to 62 (Dedicated CPU cores) 24 (Dedicated RAM) Independently Configurable Cloud 8 3 1,2 If you only need one CPU, with the 24GB of RAM you ll be paying for more CPU than you ll be using with all providers except a provider that offers independently available RAM like. COMPARING CLOUD COMPUTING STORAGE Cloud storage takes many forms and it s vital to understand the differences Cloud providers offer. The market has Cloud providers that offer everything from local storage to SAN storage and they use everything from consumer grade to enterprise grade spinning disk hard drives and/or solid-state drives (SSDs). It s very important to understand each of these different storage options and their varying levels of performance, redundancy, and availability. First, let s look at temporary local storage. Sometimes referred to as scratch disk, or ephemeral storage, this is disk space attached to the virtual server that typically has no redundancy and will be deleted if the server is stopped or restarted. As such, you ll need less than 1GB of it, because most cloud users only run the base OS on it. It s important to note that you can not use ephemeral storage for actual relevant data because it is temporary and all data will get lost eventually. Some providers that require their customers purchase large amounts of ephemeral storage as part of the pre-packaged virtual servers they offer. Amazon EC2 and are examples of providers that include ephemeral storage with their virtual servers. In other words, with pre-packaged providers, when you want more CPU or RAM you are forced to buy more temporary storage you simply don t need. Below you ll see how both Amazon (on their website) and (in a web chat) recommend to their future clients to not use the temporary storage included with their virtual servers. One of the key differentiating factors in terms of storage is whether the storage is ephemeral (or temporary) or if the storage is persistent, like block storage. It s also important to know if there is any redundancy and how fast the storage is Amazon Website The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 6 of 17

7 Webchat All providers offer a block storage option, and some providers like only offer block storage. Unlike temporary storage described above, this is storage you ll actually want to use to store data. Block storage creates storage volumes. Each volume can be formatted separately and thus mimics an individual hard drive and data stored on it will remain on it, even if the virtual server crashes or is deleted. Most cloud providers offer some level of redundancy built into their block storage. Below are examples of how several vendors approach that redundancy, with better resulting availability: Vendor Block Volume Redundancy Max Volume Size Amazon EC2 Elastic Block Storage (EBS) Multiple servers in an Availability Zone 1TB Double redundant RAID 1 across two availability zones 16TB Cloud Block Storage Redundant RAID inside a data center 1TB The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 7 of 17

8 Performance can lag with block storage solutions because I/O through across the internal network can be a bottleneck. solves this problem by connecting all virtual servers with block storage via InfiniBand running at much higher speeds and much lower latency as is available with typical Ethernet networking. Amazon EC2 addresses this problem by offering Provisioned IOPS volumes for their EBS offering. Amazon charges additional amounts for Provisioned IOPS volumes, while includes high-speed InfiniBand storage connections at no charge. Another option gaining in popularity are Solid-state drives (SSDs) which are most common with enterprise-class solutions. Many providers give you the option of using either premium-priced SSDs or standard hard drives. While SSDs can be valuable for I/O intensive applications, they need to be coupled with a fast internal network for optimal performance. Some providers also charge for I/O requests and the public and private network traffic to storage. This may be the most complicated to calculate of any cloud computing pricing scheme, where cloud users are billed for the actual number of times the head touches the disk. This is often a factor driven by the OS, application, and database, therefore out of the control of the cloud buyer. There are cases where companies pay significantly more in I/O charges than their actual VMs at the end of the month. For example, Amazon EBS charges $.1 per million I/O requests. These seem like inexpensive amounts, but can add up extremely quickly with certain applications. Remember, the key differentiating factors in terms of storage are whether it is ephemeral or permanent, if it has redundancy, and how fast the network connection is. COMPARING CLOUD COMPUTING BANDWIDTH There are two dominant models that providers use to charge for bandwidth in and actual out of the data center: charging for a fixed bandwidth, e.g. 1 Mb/s, or charging by the GB for data transferred. Those Cloud Computing providers charging by speed are usually enterprise offerings that include a certain speed in their high base price. Depending on the provider, you may be able to pay for more Mb/s. Providers charging by the GB use a true pay only for what you use model. Note: be wary of providers that require you to estimate your bandwidth usage when you sign up, because if you burst above that level, you can be charged an overage fee of as much as $.3 per GB. For providers charging per GB, there are factors to consider other than just the price per GB. Another factor in bandwidth pricing models that can have a significant effect on cost is whether a provider charges for both inbound and outbound traffic, or just outbound. Providers charging for both sometimes have different prices for inbound and outbound which just adds to the complexity. Others simply charge one price, for outbound. It s important to understand your usage model and workload in estimating your bandwidth costs. COMPARING CLOUD COMPUTING PRIVATE NETWORKS Cloud computing providers that offer the ability to create private networks are growing in number, but it s important to understand some key differences. For example, some providers charge for each connection, some charge for private network traffic, while some charge for higher connection speeds, and others charge for all three! And then there are providers like that do not charge for private network traffic, and they also offer the ability to maintain an unlimited number of high-speed InfiniBand powered private network connections. The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 8 of 17

9 For applications with high I/O needs, vendors with very fast internal networks are the best alternative. More specifically, big data clusters or distributed databases will thrive in an environment with large amounts of throughput. Most commodity cloud providers use 1Gbit/s or 1Gbit/s interconnects with the throughput being throttled anywhere from 3Mbit/s to 6Mbit/s, depending on the size of the virtual server. Enterprise Cloud providers typically use at least 1Gbit/s interconnects, with some providers using double 4Gbit/s InfiniBand connections that achieve throughput of as high as 6,Mbit/s. Also very important for the speed of many workloads is the latency of the network here again the InfiniBand networking provides tremendously better performance. The difference in throughput between using an InfiniBand connection and a throttled 1Gbit/s Ethernet connection is enormous. Distributed databases and big data clusters will not be able to run as efficiently using low throughput connections. For applications that make use of SANs, clusters, and distributed databases, internal network performance is one of the most important factors in deciding on a vendor and should always be included in vendor comparisons. The best way to understand a Cloud provider is to review performance benchmark testing like those available from Cloud Spectator. In the charts below you can see Amazon EC2 and Cloud s performance results from the popular Iperf network performance benchmark. A recent copy of their performance benchmarks is available. Iperf: Amazon Iperf: EC2 Amazon vs EC2 vs Iperf: Iperf: Cloud vs Cloud vs 7 6 Amazon 7 6 Amazon 6,358 6, ,245 6, ,111 6,111 Average Mbits/s Average Mbits/s ,95 5,95 Average Mbits/s Average Mbits/s m1.medium m1.medium m1.xlarge m1.xlarge 1 vcpu/3.75gb RAM 1 vcpu/3.75gb 4 RAM vcpu/15gb RAM 4 vcpu/15gb RAM 4GB 4GB 15GB 15GB 2 vcpu/4gb RAM2 vcpu/4gb RAM 6 vcpu/15gb RAM 6 vcpu/15gb RAM Test Results Test Iteration Amazon 1 vcpu/3.75gb RAM 1 vcpu/3.75gb RAM Amazon 4 vcpu/15gb RAM 4 vcpu/15gb RAM Test Test Test Average Mbits/s UnixBench: Amazon UnixBench: EC2 Amazon vs EC2 vs UnixBench: UnixBench: Cloud vs Cloud vs The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 9 of 17 Amazon Amazon

10 Test Iteration 2 vcpu/4gb RAM 2 vcpu/4gb RAM 6 vcpu/15gb RAM 6 vcpu/15gb RAM Test Test Test Average Mbits/s Network architecture flexibility is also an important factor to consider. Some cloud computing providers do not allow any private networks and others offer very limited capabilities., for example, was designed with the network architect in mind, and offers complete flexibility any network connection that can be made via a patch panel in a physical data center can be made on the cloud. While the ability to offer user-defined private networks is a relatively new feature, some providers like Amazon, for years, charged extra for this capability VPC offering free in 213. recently announced its intention to support flexibility networking. And then there are some enterprise providers like IBM who charge a one-time $9 setup fee, then $1 per VLAN. The IBM example shows how big of a difference certain services like included private networking can make in your price comparisons. COMPARING CLOUD COMPUTING CUSTOMER SUPPORT COSTS Customer support is not always free or simple to budget for in the cloud either. Some providers offer high levels of free support, while others charge for various support models. Providers like and provide a very high level of support for their services at no extra charge. However, like most of Amazon s pricing schemes, their support fees are complicated. Here is the AWS support structure with corresponding prices for each tier: Support Type Basic (no direct or phone support requests) Developer Business Enterprise Price per Month Included $49/month Greater of: $1 OR 1% of monthly AWS usage for the first $-$1K 7% of monthly AWS usage from $1K-$8K 5% of monthly AWS usage from $8K-$25K 3% of monthly AWS usage over $25K Greater of: $15, OR 1% of monthly AWS usage for the first $-$15K 7% of monthly AWS usage from $15K-$5K 5% of monthly AWS usage from $5K-$1M 3% of monthly AWS usage over $1M Now, at first glance, this model looks like if you re spending $1, per month on AWS and want Business Support, then your support costs will be $1, x 5% = $5, per month. However there are other factors that must be considered. AWS factors in every tier below that so if you re spending $1, on your additional customer support costs are actually: The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 1 of 17

11 $1, * 1% = $1, $7, * 7% = $4,9 $2, * 5% = $1, TOTAL = $6,9 Contrast this with vendors offering free support, like or, and suddenly, the AWS s of the world become less attractive. PART 4: OVERVIEW OF CONFIGURATIONS With price structure variability, there are two factors to consider. First is the need to differentiate between those services or features which Cloud providers charge for and those that are included. For example, some providers include different types of redundancy, failover, firewalls, and load balancers, while others do not. Similarly, some providers charge for disk I/O and customer support, while others do not. Understanding the differences between what certain Cloud providers include can save you money. Second is configuration flexibility, granularity, and pre-packaged sizing. More specifically, understanding the amount of CPU, RAM and disk needed by your application is key. In a world where pre-packaged, cookie-cutter configuration sizes are the dominant design, you may very well be paying for more than what you need or use. Whatever happened to only paying for what you use? Isn t that the promise of the cloud? Most first generation Cloud companies have followed AWS s lead and offer pre-packaged server configurations with a tiered pricing model. However, these inflexible configuration sizes lead to a lack of customization. If you need proportionally more CPU than RAM or disk, you will have a difficult time trying to find a satisfactory pre-set configuration on most providers. Independently customizable solutions were introduced to solve the problem of a lack of configuration flexibility. With these services, you can select the desired amount of CPU cores, RAM and storage needed for your VMs. You pay for what you use with the most granular offerings. Some offerings are independently customizable, but are not as granular. For example, if you are looking for 6GB of RAM you may have to choose between 4GB or 8GB, but at least these solutions are much more flexible than the cookie-cutter, pre-set instance sizes model. Granular, independently customizable offerings are the only way to replicate on-premise hardware configurations and the only way to closely mirror actual application and database resource needs. The issue then becomes how to compare independently customizable VM prices to pre-packaged offerings. We will have one example below to show how important it is to be able to choose the exact configuration of the virtual server. In this example you will see the price difference of freely configurable block storage vs. having pre-set amounts of temporary storage in a package. First, let s examine basic server configurations, taken directly from the Amazon EC2 and Cloud websites, and compare the pricing for three Amazon EC2 instances and five Cloud instances with. The comparisons on this page assume (wrongly) that the user will only need temporary or ephemeral storage. only offers redundant block storage. The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 11 of 17

12 Compare Amazon EC2 with Cores RAM Temporary Storage Block Storage Amazon EC2 Price (hour) Amazon EC2 Price (3 days) Price (hour)* Price (3 days)* M1 Medium Instance M1 Large Instance M1 Extra Large Instance * All storage is redundant block storage Compare Cloud with Cores RAM Temporary Storage Block Storage Cloud Price (hour) Cloud Price (3 days) Price (hour)* Price (3 days)* 1GB GB GB GB GB * All storage is redundant block storage beats both services on price. It s important to note that AWS and configurations include entirely temporary storage. It goes by many names but whether it s called ephemeral, temporary, or scratch, the default storage that comes with most cloud computing servers cannot be trusted. Unlike block storage, which is attachable separately at an additional cost and has built in redundancy, ephemeral storage is typically bundled into the base cost of a server. The storage can go down at any time and has no high availability or disaster recovery. Now, let s take a look at those same configurations, but reduce the amount of temporary storage to the actual reasonably usable size of 1GB and add in block storage. Block storage is what you ll actually use for real data. The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 12 of 17

13 Compare Amazon EC2 and Block Storage with Cores RAM Temporary Storage Block Storage Amazon EC2 Price (hour) Amazon EC2 Price (3 days) Price (hour) Price (3 days) M1 Medium Instance M1 Large Instance M1 Extra Large Instance Compare Cloud and Block Storage with Cores RAM Temporary Storage Block Storage Cloud Price (hour) Cloud Price (3 days) Price (hour) Price (3 days) 1GB GB GB GB GB As you can see from the tables above, when we reduce the temporary storage to 1GB which is more than most virtual servers will ever use and we add block storage in sizes typically needed for your valuable data, the pricing changes dramatically. This time, wins on price in every configuration with even higher savings. Note: These prices illustrated above are only base configurations and do not factor in bandwidth and support costs. Bandwidth models are highly variable (see Comparing Cloud Computing Bandwidth section of this report). PART 5: OTHER CONSIDERATIONS UNDERSTANDING PRICE-PERFORMANCE IN THE CLOUD The performance of the virtual server and its components: CPU, RAM, Disk, Network are often overlooked by cloud buyers when comparing providers. Third parties are emerging that benchmark different providers and they are finding significant discrepancies in provider performance comparisons. Virtual server performance test measurements should include metrics for CPU, RAM, storage, and internal network. These third-party companies are able to quantify comparisons to understand why many AWS customers have to spin up two instances when only one is necessary with other providers. The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 13 of 17

14 Average Mbits/s Iperf: Amazon Iperf: EC2 Amazon vs EC2 vs Amazon Amazon Buyers 5use these benchmarks, in conjunction with pricing, to more accurately analyze the value of each service, 4 identifying the best services for certain applications and workloads. Buyers can also use price-performance metrics 3 to distinguish high performance computing-class performance from commodity-class performance, making sure they are paying a fair price for the performance they receive. Average Mbits/s , , , , Cloud computing providers virtualize, 4 4 allocate and architect 3 3 very differently from one another. Performance variability Applying price/performance ratios is the more complicated 195 process and it depends on how accurate the buyer wants Cloud Computing 2. services. m1.medium m1.medium m1.xlarge m1.xlarge 4GB 4GB 15GB 15GB to 1 vcpu/3.75gb be or the needs 1 RAM vcpu/3.75gb of the 4 application. RAM vcpu/15gb RAM 4 Some vcpu/15gb buyers RAM seek a 2 vcpu/4gb RAM 2 vcpu/4gb RAM 6 vcpu/15gb RAM quick answer that involves measuring price-performance using a general server benchmark test. Other buyers may opt to measure price-performance using tests that measure the most integral resource needed to their application, e.g. CPU or disk I/O. Cloud computing providers virtualize, allocate and architect their specific platforms differently from one another. Performance thrives with some services and suffers with others. Some vendors provide their customers with dedicated compute resources as described above in the CPU and RAM section, while others practice over-subscription, degrading customer performance. Here is a sample recent performance test in this case Cloud Spectator ran the popular UnixBench benchmark against Amazon EC2, Cloud and. Average Mbits/s 7 6 Iperf: Iperf: Cloud vs Cloud vs Average Mbits/s 7 6 6,245 6,245 their specific platforms 6,111 combined with the common noisy 393 neighbor problem gave rise to 6,111 6 vcpu/15gb RAM UnixBench: Amazon UnixBench: EC2 Amazon vs EC2 vs UnixBench: UnixBench: Cloud vs Cloud vs Amazon Amazon ,161 2, ,559 2,559 Average Score 15 Average Score 15 1,98 1,2 1,98 1,2 Average Score 15 Average Score 15 1,643 1,643 1,249 1, m1.medium m1.medium m1.xlarge m1.xlarge 1 vcpu/3.75gb 1 RAM vcpu/3.75gb 4 RAM vcpu/15gb RAM 4 vcpu/15gb RAM 4GB 4GB 15GB 15GB 2 vcpu/4gb RAM 2 vcpu/4gb RAM 6 vcpu/15gb RAM 6 vcpu/15gb RAM The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 14 of 17

15 Test Results Test Iteration Amazon 1 vcpu/3.75gb RAM 1 vcpu/3.75gb RAM Amazon 4 vcpu/15gb RAM 4 vcpu/15gb RAM Test Test Test Average Score Test Iteration 2 vcpu/4gb RAM 2 vcpu/4gb RAM 6 vcpu/15gb RAM 6 vcpu/15gb RAM Test Test Test Average Score comes out roughly twice the performance over Amazon and. In their summary of the report, Cloud Spectator states: In general server performance, file IO, and internal network, VMs outperformed Amazon EC2 and in all tested VMs. In a comparison with Amazon EC2, the m1.medium and m1.xlarge instances were selected for this test and the same resource configurations were matched on instances. Similarly, resource capacity for s 4GB and 15GB servers were matched on instances. performed at least 2x better in all tests except against Amazon EC2 s m1.xlarge General Server Performance comparison, where it scored 1.8x higher. dedicated CPUs explain the increased performance against Amazon EC2 and Cloud; while users receive physical cores, Amazon and users receive vcpu cores, which are shared physical CPUs. The network throughput results, which score as high as 2.4x faster than Amazon EC2 and 32x higher than, is expected, as utilizes dual InfiniBand interconnects, which deliver a bandwidth of 4Gbit/s per connection for a total of 8Gbit/s per physical server. Providers like Amazon and achieve much lower throughput because of their inherent bandwidth limitations, which utilize Ethernet to achieve anywhere from 1Gbit/s to 1Gbit/s bandwidth. To download a free full copy of the report simply visit this site: Comparison.html Firewalls Very few providers charge for software firewalls. Those that do charge usually price them in the range of $7-$1 per month per firewall. The standard in the industry is to include a software-based, user-configurable firewall. The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 15 of 17

16 Load Balancers Some providers charge for load balancers, while others, typically enterprise offerings, include them with the service. Like many other features and services covered in this report, Cloud providers charges for load balancing vary. A popular way vendors price them is to charge for a separate VM that the load balancing software runs on. Below is a pricing breakdown for four of the providers that charge differently for load balancers. Outbound data transfer charges also apply. Load Balancer Pricing Provider Price per Hour Variable Price Amazon $.25 $.8 per processed GB Free Free $.15 ($.5 w/ SSL) $.15 per connection per hour PRICING SCHEMES Billing Cycle Cloud Computing was supposed to usher in an era of consumption-based metering and billing just like your electric utility service. However, many traditional providers like Amazon still meter usage and bill by the hour or month. Some providers, like, bill by the minute. The advantages of shorter billing cycles are that if you only need a VM for half of an hour, you only get charged for half of an hour, instead of the full hour (which most providers do). If you frequently start and stop instances, a common practice for development or test workloads for example, these overbillings can add a significant amount to your monthly charges. Pre-Payment Even if they run on hourly billing cycles, there are providers who will make customers pre-pay for the month when spinning up a VM. These providers will then offer you a credit on the amount that you have left over. Others lure customers in with long-term discounts, but require customers to pay all or a large portion of it up-front, which negates any real pay as you go benefits, as the customer will lose all of their pre-paid services that go unused. Setup Fees Setup fees are most common with enterprise offerings. Some providers charge a setup fee just for provisioning a VM, while others charge a setup fee for certain services, like IBM charging a setup fee for VLANs. Some providers charge a Cloud access fee which is then credited against actual usage this could also be called a minimum monthly fee. Cloud buyers must be very wary of setup fees, especially if they do not expect to utilize the VM for long periods of time. The Secret World of Cloud IaaS Pricing: How to Compare Apples and Oranges Among Cloud Providers Page 16 of 17

17 PART 6: CONCLUSION The Cloud Computing IaaS industry is still developing, which is evident by the variability in pricing structures. There are many providers and we hope this white paper provides you with a guide to make an informed decision on what to look for. Believe it or not, some providers have many more fees and caveats in the small print on long pricing pages as in Amazon s case where, their high utilization instances are billed at the standard rate whether they are used or not. Is that Cloud Computing pricing or a legacy of complicated hardware and software pricing that procurement departments were set up to protect companies against? Pricing terms like this resemble a dedicated server or the lease of an on-premise server. As the industry advances, we hope pricing structures will consolidate more and that true Cloud Computing consumption based billing becomes the norm. is completely focused on being transparent and offering the best price and performance ratio of any provider. Profitbricks has created a special pricing microsite that can help you realize savings of 43% to 8% off other providers while showing you how you can get at least 2x the performance. For now, cloud buyers are advised to understand their infrastructure requirements and target configurations. If you are reading this, you have already taken the time to educate yourself and your team on how to look at Cloud Computing pricing, and you re now empowered to start performing apples to apples comparisons of Cloud Computing IaaS offerings. The old days of price shopping a physical server based on amounts of CPU, RAM, and storage are over. Cloud Computing 2. ushers in a new, scalable, flexible and consumption based method of buying compute, networking and storage infrastructure. Learn more about Simple No-Nonsense Cloud Computing 2. Pricing by visiting our Cloud pricing microsite at: You ll learn how to save 43% to 8% while still getting 2x the performance of the Cloud 1. providers. This report was written by with pricing and performance data provided by Cloud Spectator in July 213. US Office Inc. 15 Tudor Street Cambridge, MA 2139 Phone: Fax: German Office GmbH Greifswalder Str Berlin, Germany Phone: +49 [] Fax: +49 [] twitter.com/profitbricksusa blog.profitbricks.com 213, Inc. All rights reserved., the logo and Dynamic Data Center are trademarks of Inc. All other trademarks are the property of their respective owners. reserves the right to make changes without further notice.

The Secret World of Cloud IaaS Pricing in 2014: How to Compare Apples and Oranges Among Cloud Providers

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