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Cloud billing triggers anxiety

IT shops are keen on the idea of dynamically spinning up servers and storage in the cloud but worry about the open-ended nature of cloud costs and billing.

LAS VEGAS -- Anyone that's opened a monthly phone bill is acutely aware of the angst it can trigger when charges are wildly out of wack with expectations.

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Variable-rate pricing for cloud infrastructure services can kick off just these kinds of anxiety attacks among IT managers and CIOs who are used to the fixed costs associated with owning hardware themselves.

"Adding another billing model on top of what a CIO is already dealing with adds some friction," said Jesse Robbins, the co-founder and CEO of Opscode, a cloud infrastructure management startup, during a panel session on cloud costs and billing models at the Enterprise Cloud Summit here this week.

Where's the visibility and control?
Daryl Ford,
director of communications and infrastructure services,University of Massachusetts

"Paying for servers by the CPU per hour is not something we know how to budget for," said an attendee at a global food services company. "There needs to be more metering … an ability to manage usage departmentally to keep close control of it," he said.

Microsoft's Amitabh Srivastava, the senior vice president of Windows Azure, agreed that the pricing and billing aspect of cloud services is a "very genuine worry" among customers. Azure will be available in a pay-as-you-go model but also feature discount pricing for commitment up-front, and companies can cap it, he said. In addition the Azure pricing model will be folded into enterprise agreements so that companies are not managing different pricing schemes that would make it more difficult to track and plan budgets.

Weighing cloud billing options
But if thresholds are established on usage, attendees worried that users would be cut off in the middle of doing important work.

"Where's the visibility and control?" asked Daryl Ford, the director of communications and infrastructure services at the University of Massachusetts, Boston.

Scott Clark, a senior manager of engineering systems at Broadcom Corp., said that he needs to be able to show his management a flat rate. "Either my budget is staying the same and I am getting a lot more for it or it's going down," he said.

Clark is looking for a cloud infrastructure provider that can save him the capital expenditure on equipment, something Broadcom spends millions of dollars on. "If [cloud providers] are doing things at bigger economies of scale, I shouldn't have to pay a premium for those services. … I want to know what they are doing to make sure their costs are visible and that the real price savings are getting back to me," he said.

Companies in the cloud computing billing market include Zuora Inc., eVapt Inc. and OpSource Inc., among others.

Jo Maitland is Executive Editor of Write to her at And check out our Troposphere blog.

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