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Free-falling cloud prices can't buy enterprise love

Even as vendors slash their prices, choosing a cloud platform is about more than the costs. Cloud features and performance top enterprise wish lists.

As cloud providers battle for dominance in the infrastructure as a service market, cloud prices continue to drop. And while no one is arguing against cheaper pricing, other factors -- such as features and performance -- are more important to enterprises choosing a cloud environment.

"If you're really marrying a cloud, and this is the platform you're going to be on for the next 10 years, it's hugely significant that you pick the right one based on the metrics you have, cost utilization, features and functions," said David Linthicum.

In a recent podcast, Linthicum discussed enterprise cloud considerations and other topics with Sharon Wagner, founder and CEO of cloud management and monitoring vendor Cloudyn. Other discussion points include:

  1. Do cloud providers with the lowest prices always win out? "As we're working these price models out for clients, we do notice that [it] ends up being a rare occurrence when the low cost competitor actually wins," Linthicum said.

    So what do enterprises prioritize when choosing a cloud platform? Performance and feature set tend to trump price. "When enterprises go to the cloud, they are looking for a higher level of service and it's not necessarily always around cost," Wagner said.

    Will cloud prices continue to drop? "Commoditization in prices will happen sometime very soon," Wagner said. "At the end of the day, prices will be virtually the same in Amazon, Google, Microsoft or whoever it is."

    "Everybody is going to drop prices until they can't drop prices anymore," Linthicum said. (5:40-10:00)

  2. Amazon Web Services (AWS) has traditionally dominated the public cloud market. But what is AWS' cloud strategy going forward? "They want to have everything -- the entire enterprise IT in Amazon Web Services," Wagner said.

    What are AWS' future plans? "Eventually what I think they want to do is to have all public cloud," Wagner said. "No doubt about it."

    Linthicum believes AWS will remain public cloud-focused. "[AWS] always said that it's public cloud-centric," Linthicum said. "They continue to stick with that and I think they're morphing a bit to adapt to the market and the way the enterprise wants to consume the technology." (10:03-14:00)

  3. While cloud security remains a major IT concern, is the cloud actually insecure? "You look at the security breaches where credit cards were stolen and even health records with this insurance company that was hacked into a couple of months ago, [and] there's not a cloud around," Linthicum said. "So cloud seems to have a PR problem in some circles."

    Wagner agreed that, when it comes to security, cloud gets a bad rap. "I tend to believe that Amazon Web Services or Google or Microsoft Azure will better protect my data than a system engineer in-house just because they have more expertise," Wagner said. "We know if you want to go to the cloud, you have to become as secure as possible." (14:03-19:20)

Next Steps

Price is not the foremost public cloud consideration

Google drops its cloud prices -- again

IaaS price wars are just getting started

This was last published in April 2015

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They may (or may not) be attracting Enterprises directly, but the falling prices are most likely influencing the negotiating abilities of Enterprises with their vendors. More and more IT groups are now going to their vendors and saying "my devs have already moved to AWS, and I want to get them back, but they need the pricing to be $x.xx"
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