At first glance, understanding cloud computing pricing models can feel like learning how to make a grilled cheese sandwich: it’s so easy anyone can do it, right?
Well, not exactly. While cloud pricing often seems foolproof, the reality is more complex. Much of the confusion stems from the fact that cloud buyers subscribe to various myths that obscure how complicated figuring out what cloud computing will actually cost you, let alone what it can be Optimize your cloud spend.
For some clarity, let’s take a look at common cloud pricing myths and discuss why cloud pricing is often more complicated than it first appears.
Myth 1: In the cloud, you only pay for what you use
Most lists of reasons for using the cloud include a line about how, in the cloud, you only have to pay for the infrastructure that your workloads actually consume. The idea is that the cloud allows for much more efficient spending as you don’t waste money on servers you don’t need like you would if you buy physical machines and then end up not using all of them constantly.
The reality is more nuanced. It is certainly true that in the cloud you can spin up server instances when you need them and shut them down when you are no longer using them. You only pay for the time the servers are actually running.
However, that doesn’t mean you can’t waste money on cloud servers you don’t need. You could keep servers running unnecessarily because you forget to shut them down. You can also choose server instances that are more expensive than you actually need for your workloads. Both mistakes result in wasted money. You would still be “using” the servers in the sense that they were operational, but you wouldn’t be using them fully.
Conclusion: The cloud does not protect against the risk of wasting money on unneeded infrastructure. You can spend money in the cloud just as easily as on-premises.
Myth 2: Cloud pricing is pay-as-you-go
You’ve probably been told that the cloud is wonderful because you pay as you need it. There are no upfront costs or major capital expenditures to worry about—at least in theory.
In reality, there may well be upfront costs. For example, if you choose to have a “reserved” cloud VM instance – which is possible because reserved instances cost less – you might pay for the instance up front.
Additionally, there can be significant costs migrating workloads to the cloud in the first place. Refactoring applications, training employees, setting up new tools, etc. can cost hundreds of thousands of dollars or more.
So it’s true that sometimes you can easily pay as you go in the cloud, but that’s not always the case.
Myth 3: Support services are built into cloud pricing
You might assume support is built-in when you pay a cloud provider for IaaS or SaaS services.
Actually it can’t be, at least not to the extent that you need. Although the major cloud providers offer “basic” support plans for free with most of these services, these free plans typically mean little more than access to publicly available documentation and automated tools for managing your environments. If you want actual, hands-on tech support, you usually have to pay extra for it.
Myth 4: Cloud pricing is consistent
Perhaps the biggest flawed assumption you could make about cloud pricing is believing that all cloud providers’ prices are consistent.
In reality, not only cloud providers do this change their prices routinely, but they also have a habit of charging significantly different rates for the same services within different areas cloud regions.
They also don’t bother to compare prices between regions, which means it can be very difficult to know you’re getting the best price for a particular service. Hosting your workload in Western Europe, for example, might turn out to be significantly cheaper than Central Europe, but you won’t know unless you do the comparison manually.
Myth 5: Cloud pricing is transparent
All major cloud providers publish complete price lists for all their services. They even offer cost calculators that you can use to predict how much a specific workload will cost you. It’s hard to imagine a more transparent pricing model than this, right?
Well, probably it’s not that transparent. While it’s true that cloud providers don’t hide their prices, they use extremely complex pricing schemes that can make it very difficult to optimize costs. In addition to the basic fees for their various cloud services, cloud providers charge for things like data egress (but not ingress!) and cluster management. Your pricing can also vary widely depending on whether you choose auto-managed infrastructure (like AWS’ “Fargate” mode) or self-managed infrastructure. And then the prices again vary greatly from region to region.
For these reasons, the way cloud providers publish pricing information appears to be similar to what is known in the legal world as “document dump“: They inundate customers with so much pricing information and detail that it’s difficult to sort through. Cloud pricing may be technically transparent, but that doesn’t make it very accessible or understandable.
It’s easy to underestimate the challenge of controlling cloud spend. But that’s a big mistake. Predicting cloud costs and optimizing spend is just as difficult as deploying and managing cloud workloads—although cloud providers don’t always admit how complicated their cloud pricing is.
About the authorChristopher Tozzi is a technology analyst with expertise in cloud computing, application development, open source software, virtualization, containers and more. He also teaches at a major university in the Albany, New York area. His book For Fun and Profit: A History of the Free and Open Source Software Revolution was published by MIT Press.