451 Research introduces Cloud Pricing Codex

The Cloud Pricing Codex helps organizations tackle pricing plans that vary hugely among cloud service providers, not just in terms of virtual machines but also service bundling, billable attributes and usage metrics. It breaks down virtual machine pricing methods into a cloud pricing taxonomy that enables cloud consumers to assess the strengths and weaknesses of each pricing model. The Cloud Pricing Codex shows the classification of pricing options and bundles for a number of IaaS providers.

“In planning a Digital Infrastructure strategy, it is crucial that CIOs and CFOs assess all pricing methods available to them and fully understand each model’s benefits, risks and features,” said William Fellows, research vice president at 451 Research and co-author of the report. “Using the Cloud Pricing Codex enables companies to create a playbook that defines how the cloud – and its range of services, providers and models – can be fully utilized to deliver best value.”

The Cloud Pricing Codex is grounded in a 451 Research survey of 53 IaaS providers that found large differences in the methods and metrics used by providers to bill consumption, as well as in the extent to which these methods are made public; only 64 percent of providers were found to publish prices online.

The Codex aims to pull back the curtain of confusion surrounding IaaS pricing, by categorizing all current on-demand, reserved and committed pricing methods into eight simple groups, with each group having its own features, benefits and considerations for both consumer and provider. This taxonomy of pricing methods allows CIOs and CFOs to better understand the options available to them, and make informed, strategic decisions based on business risk and best value. The Codex includes a breakdown that shows which providers offer which methods, so decision-makers can make simpler like-for-like comparisons without having to navigate through each provider’s differing terminology and literature.

The Cloud Pricing Codex also includes a taxonomy of billing attributes which shows the breadth of cloud charges consumers can expect to see on their bill and the typical metrics used to measure this consumption, thereby alerting CIOs and CFOs to their financial obligations when using the cloud.

“Cloud computing once promised simple, usage-based charging for resources, similar to other utilities such as electricity; unfortunately, the current reality is far from this ideal,” said Dr. Owen Rogers, cloud economist at 451 Research and co-author of the report. “The Cloud Pricing Codex aims to simplify a complex economic landscape so informed strategies in the development and implementation of cloud services can pursued by providers and consumers.”