ISG Cloud Comparison Index : October 2015

Transcription

1 Data & Research ISG Cloud Comparison Index : October 2015 The second ISG Cloud Comparison Index finds that the price of using a public cloud version of Linux, the popular open-source operating system, is very cost competitive with our internal IT benchmark, even when cloud usage is high. Key Findings Using a public cloud version of Linux is highly competitive with internal ITThe price of our configuration using each public cloud providers free version of Linux is lower than our internal IT benchmark until cloud instance usage reaches 78 percent, compared to 57 percent cloud instance usage for Windows or Red Hat Enterprise Linux. However, buyers should be aware of a significant price difference between public cloud providers when using cloud Linux. We found a nearly 40 percent difference between the highest and lowest prices for our configuration running public cloud Linux when instance usage is 100 percent. Cloud cost calculators often default tocloud Linux as the operating system of choic, which may mask additiona costs if an enterprise-class operating system is require. An overwhelming number of ISG clients use Red Hat Enterprise Linux or Windows Server for the majority of their applications. Including these operating systems int the cost calculation can increase the public cloud pric by more than 33 percent over cloud Linux, and does not take into account any refactoring costs that may be required to run the application on a lowe-cost operating system. As expected, we saw a very small drop in average cost of our internal IT benchmark, which corresponded closely to the average price drop in the public cloud, since our last study. These cost and price drops mean that the break-even point for our configurationrunning Windows Server is now 57 percent cloud instance usage. Background In the inaugural ISG Cloud Comparison Index, published in June 2015, we set out to help enterprises understand the relationship between usage and cost in the public cloud, an how those costs compare to a traditional IT environment. To accomplish this, we created a model of a small configuration that reflects one type of infrastructureservice buyers oftenpilot in the public cloud. We then priced this configuration in the pblic cloud across four providers: Amazon Web Services, Google Cloud Platform, IBM SoftLayer and Microsoft Azure. We thcreated a cost for this configurationbased on ISG s proprietary benchmarking database (see the Methodology and Assumptionssection below for more detail on our approach).

2 The first ISG Cloud Comparison Index focused exclusively on a Windows-based configuratio and found that cloud instance usage plays a significant role in how competitive thprice of public cloud is with the cost of internal IT. Based on the findings from the inaugural report, we have created four pillars of public cloud pricing that we believe will hold true for the foreseeable future as enterprises compare the cost of running a workload in their data center, or in the public cloud. These four pillars are detailed below. In this, the second ISG Cloud Comparison Index, we have expanded our analysis to include both free versions of Linux from public cloud providers as well as Red Hat Enterprise Linux. The Four Pillars of Infrastructure Pricing 1. Cloud is not always cheaper. Instance usage is a key determinant of cost in the public cloud. High levels of cloud instance usage can create scenarios in which internal IT is more cost effective;conversely, low levels of cloud instance usage can create a scenario in which internal IT is more expensive. 2. Public cloud creates significant cost avoidance opportunities for volatile workloadsan enterprise should avoid viewing public cloud only as a lever to reduce operational costsin the same way they might have viewed outsourcing in the past. 3. Applications that take advantage of automation to -provision unused images can help clients capture potential savings Since usage drives cost in the public cloud, applications with the most variable usage patterns are strong candidate to move to the public cloud. 4. Mapping usage patterns and technology requirements to public cloud providers will helpenterprises identify the lowes-cost optio. Given the variable nature of pricing across Infrastructure-as-a-Service (IaaS) providers, clients likely won t know the full cost of the applicatio and associated cost-avoidance opportunitis untilthe application is actually running in the provider s cloud. Findings for Windows Consistent with findings from the inaugural ISG Cloud Comparison Index in June, the price of our Windows configuration in thepublic cloud varies significantly from one provider to the next when server instances are activ 100 percent of the tim: prices range from $768 per month to $1,096 per month. The cost of similar internal IT configuratios is $541 per month, significantly lower than the lowest cloud price and slightly lower than the cost of this configuration in Jun. At an instance usage level of approximately 57 percent, public cloud prices are at parity with the prices in our internal IT benchmark, slightly higher than the 55 percent break-even point in June. Figure 1 shows the relationship of these price. 2

3 Figure 1: Price of Windows public cloud instance vs. internal IT Avg. Average Compute Instance Utilization When we analyzed the prices for public cloud services in relation to usag, we found a range of 43 percent, an 8 percentage point increase over our findings in June. In other words, the highest price for our configurationat 100 percent instance usage is 43 percent higher than the lowest price. The range decreases gradually as the average usage of the compute instances decreases, as seen in Figure 2. Figure 2: Windows cloud price distribution by usag Ranges Average Compute Instance Utilization Findings for Cloud Linux Public cloud prices for our standard configuration running a free version of Linuxrange from $532 per month to $738 per month. The cost of similar internal IT configurations is $510 per month. At an instanceusage level of approximately 78 percent, public cloud prices are at parity with the prices in our internal IT benchmark, as seen in Figure 3 below. 3

4 Figure 3: Price per public cloud instance with Linux vs. internal IT $900 $700 $500 $300 $100 Avg. When we analyzed the prices for public cloud services in relation to usage, we found a rang of 39 percent. In other words, the highest price for our configuration at 10 percent instance usage is 39 percent higher than the lowest price. Unlike Windows, the range between high and low price remains fairly consistent as the average usage of the compute instances decreases, as seen in Figure 4. Figure 4: Public cloud with Linux price distribution by usag $900 $700 $500 $300 $100 Findings for Red Hat Enterprise Linux Ranges Public cloud prices for our standard configuration running ared Hat Enterprise Linux (RHEL) vary from $796 per month to $910 per month. The cost of similar internal IT configurations is $59 per month, which, as we saw with Windows, is significantly lower than the lowest cloud price. At an instance usage level of approximately 57 percent, public cloud prices are at parity with the prices in our internal IT benchmark, as seen in Figure 5 below. 4

5 Figure 5: Price per public cloud instance with RHEL vs. internal IT Avg. Analyzing price spread in relation to usage, we found a rang of 14 percent. In other words, the highest price for our configuration at 10 percent instance usage is 14 percent higher than the lowest price, which is the smallest price spread when compared to Windows and free Linux. Unlike the configuration with clou Linux, prices spreads between suppliers increase as usage of the compute instance decreases, as seen in Figure 6. Figure 6: Public cloud with RHEL price distribution by usag Ranges Takeaways Ensure an apples-to-apples comparison between operating systems when comparing public cloud to internal IT. An enterprise-class operating system like Windows Server or Red Hat Enterprise Linux provide higher levels of support, increased reliability and more features than free cloud versions of Linux in the public cloud. That said, our analysis found that using Red Hat Enterprise Linux or Windows Server can increase the public cloud price by 33 percent over cloud Linux. While most production workloads wil require an enterprise-class license, ensure that this is accounted for in both the public cloud and on-premises when creating a cost compariso. 5

6 For highly utilized workloads running oncloud Linux, shop around. We found a significant price spread between the providers we analyzed when running a cloud version of Linux when instance usage is high, as much as 40 percent. Enterprises may want to consider a mult-cloud approach for workloads that can run on cloud versions of Linux and where instance usage will be high, in order to reap potentiallysignificant cost savings. Prices are dropping in the pubic cloud, but so are costs in the data center. Public cloud price wars have been highly publicized; it s no secret that the leading public cloud providers are competing to be the lowest cost provider. But it s important to remember that internal IT costs are dropping as well. We consistently find Windows Server instance costs dropping by approximately 6.5% year-over-year, Linux instance costs dropping by approximately 4.5% year-over-year, and the cost of shared storage dropping by approximately 4.5% year-over year. So the price war is occurring both on-premises and in the cloud. The key is to take a workload-centric approach to any total cost of ownership (TCO) analysis, and use the characteristics of the application to determine the mos cost-effective delivery and deployment mode Methodology and Assumption ISG defines a cloud instance as a virtual machine comprised of a specific number of CPUs and a specific amount of RAM. Cloud instance usage is the percentage of time that an instance is running and accruing charges from the public cloud provider. We created a model of a small sample configuration tat reflects one type of infrastructure we see buyers piloting in the public cloud, typically for new application delopment and teutngs The configuraton is as follows, and has not changed since our first report: Item Quantit Specificatio Application Server 4x 2 cores, 1.6 GHz per core 4 GB RAM 100 GB local disk Windows Database Servers 2x 4 cores, 1.6 GHz per core 8 GB RAM 100 GB local disk Windows Storage 1x 1000 GB NAS Given the lack of standardization in the way public cloudproviders price their services, minor variations in configuration were required to determine a price for each service. Using ISG s proprietary cost database and benchmarking expertise, we created and analyze a detailed financial model of a comparable internal IT configuration. This model functions as a snapshot the typical costs incurred by a large, internally managed IT organizatio, including the costs of all the relevant hardware, software, faciliti and labor that a corresponding public cloud service would replace. The internal IT benchmark represents the technology choices ISG currently sees enterprise IT organizations makin most frequently today. The benchmark does not adjust for differences that may exist between the technology choices of internal IT organizations andpublic cloud providers (e.g., brand of hardware, etc.). The benchmark is sensitive to scale.since ISG clients tend to be large enterprises, we have tuned the benchmark to be comparable to organizations with at least 3,000 Windowsimages and 3 petabytes (PB) of usable disk storage. Organizations with smaller scale should expect public clou prices to 6

7 be more competitive with internait operations The benchmark leverages global data normalized for the U.S. market. Public cloud on-demand pricing for cloud Linux and Windows is sourced from Gravitant and includes Amazon Web Services, Google Cloud Platform, IBM Softlayer and Microsoft Azure. Data are current as September 15, The price of configurations using cloud Linux (i.e, a version of Linux that does not incur software licensing fees) assume CentOS as the operating system. The uplift to ublic cloud pricing that is attributable to RHEL was drawn from price-lists and pricing-calculators publically available on the internet. Enterprises can often obtain ower prices by committing pre-paid instances, typically for at least one year, but this arrangement can eliminate the benefits of price drops and the opportunities to be had fro releasing resources during the committedterm. Volume discounts for IaaS can vary and are not reflected. However, our model does take into account Google s sustained-use discounts. We did not include service desk support costs in either our cloud pricing or the internal IT benchmark. This is primarily because public cloud support models vary substantially inboth service provision and pricing mechanisms. We did not include bandwidth charges in our public cloud pricing, nor did we include networking costs in the internal IT benchmark. As with any sourcing decision, provider comparisons should go well beyond pricing. Each public IaaS provider delivers different support programs, infrastructure technology, automationand features, all of which can have a significant impact on price. Your operational excellence is our business. CONTACT US Visit AccessISG Online for more sourcing information, insight and tools. Click the envelope to contact us or go to About Information Services Group (ISG) Information Services Group (ISG) (NASDAQ:III) is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operation environments through research, benchmarking, consulting and managed services, with a focus on informatio technology, business process transformation, program management services and enterprie resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest dat source in the industry, and more than five decades of experience of global leadership in information and advisory services. Based in Stamford, Conn., the company has more than 900 employees and operates in 21 countries. For additional information, visiwww.isg-one.com. 7