Buying Services from Multiple Cloud Providers Could Result in Big Savings: Report
While a one-stop shop may be more convenient, buyers who mix services such as compute and storage from multiple cloud providers can save significantly more money, up to 74 percent for a large application.
According to the latest quarterly update to the Cloud Price Index by analyst firm 451 Research, savings start at 58 percent for a small application, and go up to 74 percent for a large application, which, over three years, equals up to $23,000 in savings per web application.
The Cloud Price Index aims to help enterprises and service providers make more “informed decisions when buying and selling cloud services.” The price index is made up of a basket of goods that “is a specification of the services required to operate a typical web server application including compute, storage, databases, management and more.”
451 Research surveyed 26 cloud providers as part of its regular quarterly pricing update. For each service within its basket of goods, analysts chose the cheapest cloud provider and added costs of bandwidth using data collected in October.
“The CPI shows it is possible to achieve substantial savings by using multiple providers; however, we believe the complexity of dealing with various providers offsets any advantage at this time. Technically, there is no reason why applications can’t be architected across multiple clouds, but the potential challenges organizations face include latency between datacenters, managing different GUIs and APIs, invoicing, documentation, and support functions. As a result, we believe most users would prefer to pay a premium for an integrated solution from a single provider,” Dr. Owen Rogers, Research Director of 451 Research’s Digital Economics Unit.
“Through this analysis, we believe we have identified a tremendous opportunity for providers to bring a retail-model discipline to cloud service selection and creation,” Rogers added. “For example, providers could offer decision engines to help enterprises choose the best-value mix of services to suit their needs, and then integrate and manage these services as a managed offering.”
The latest CPI is available in North America, but will be launched in Europe, Asia and Latin America early next year.