Cloud Computing Pricing Analysis and Comparisons

Companies today are soaring high, navigating the limitless sky of cloud computing, leaving behind the grounded world of on-premises data. Why? It's all about growth, agility, and, importantly, cutting down on expenses. Imagine your data as a flock of birds, now free to fly without the constraints of physical boundaries.

The guardians of this vast sky are the three largest public cloud vendors. With shields of security and swords of data self-governance, they keep the digital landscape safe and sound.

Picture this: in 2021, a staggering 94% of the internet workload was performed on the cloud. That's nearly the entire digital universe living in the cloud! But what do we, the individual navigators of this space, expect from the Cloud?

Recent companies are adopting a hybrid strategy. They're blending, mixing, and matching to find the perfect cloud recipe. The three most popular commodity clouds are engaged in a friendly competition, vying to offer the most cost-effective cloud delicacies.

Here are some things to note as we continue to explore this domain:

1. Security First: Trust is paramount. With robust security measures, the big cloud vendors ensure that our data is as safe as a treasure in a fortress.
2. Hybrid Approaches: Like a master chef combining ingredients, companies are mixing private and public clouds to create a delectable digital dish that suits their unique tastes.
3. Cost-Effectiveness: Who doesn't love a bargain? The cloud offers an economical solution without skimping on quality, like a gourmet meal at a friendly price.

Cost Benefits of Cloud Computing

Imagine your business as a bustling city, and your data, the lifeblood that flows through it. Now, what happens if a bridge (your on-premises hardware) breaks down? Chaos, delays, and pressure mount! But what if I told you there's a magic bridge that fixes itself?

Welcome to the world of cloud computing!

The Magical Self-Repairing Bridge: The Cloud ☁️

With cloud computing, if a server or virtual machine (VM) breaks down, it's like a bridge that magically repairs itself. Your business doesn't feel a tremor. The cloud provider, your friendly neighborhood engineer, takes up the responsibility to get it working once again.

Comparing Costs: Cloud vs On-Premises

When we compare the running costs, the Cloud is like a budget-friendly express train that's cheaper than on-premises hardware. Why? Let's explore:

1. PAYG (Pay-As-You-Go) Pricing: Think of it like a buffet. You only pay for what you eat (use), allowing you to enjoy a feast of services without emptying your wallet.
2. Elastic Scaling: Need more space? Stretch and shrink as needed, like an accordion. Your cloud can grow and contract with your business needs, all without a hefty price tag.

A Closer Look at the Big Three: Azure, Google Cloud, and AWS

These are the giants, the titans of the cloud world, each offering unique flavors and pricing. Think of them as your favorite coffee shops, each with its signature blend. Azure may offer a robust dark roast, Google Cloud a smooth cold brew, and AWS a rich espresso.

To choose the right one, it's essential to look at the comparisons between these three. What are their specialties? How do they charge? What's their "secret sauce"? It's like picking the perfect coffee blend that suits your taste and budget.

Amazon AWS Cloud pricing and costs

There are so many benefits to AWS cloud pricing. How many categories is it divided into? Here is a list; PAYG (pay as you go), Reserved capacity, and Volume-based discounts.

• Pay as you go: AWS compares this to the method that customers use in paying for their utilities. Normally, we pay for services only because we use them and when we use them. They compare the costs procured when using on-premises to using AWS with the extra costs for underutilization in on-premises.

• Reserved capacity: This tool is a common cloud concept that most people are familiar with. It entails the reservation of space for an important reason. For example, if you have an idea of the particular amount of storage that you'll be needing, you can as well save it for that time when you're ready to use it. Saving this would indeed reduce your costs. This can save you about 75% of the on-demand pricing on AWS. This is a great way to cut down minor charges on AWS.

• Volume-based discounts: This depends on economies of sale. When looking at storage, the more you use, the less you pay.

Google Cloud Pricing (GCP) and costs

This also uses the PAYG model and doesn't involve any activation or termination fees. Your Google Cloud cost will also have some added benefits to it such as pre-emptible VM instances, per-second billing, committed-use discounts, and sustained-use discounts.

Microsoft's Azure Cloud Pricing and costs

Azure's Cloud pricing allows its users to reserve space before time, but they will be required to leave a one or three-year commission. However, these instances that you have reserved can be canceled at any time.

Azure provides similar benefits on their Cloud pricing such as lesser costs, reserved instances, etc.

Types of offerings

• General-purpose
• Compute-optimized
• Memory-optimized
• Accelerated computing

We will be comparing across AWS EC2 VMs, Azure VMs, and Google VMs. We’ve selected instances with comparable RAM with 4vCPUs for each instance. However, have in mind that the memory-optimized and accelerated-computing instances for Google cloud are not included. This is due to their minimum vCPUs, none of which begin at 4vCPUs, unlike AWS and Azure.

Instead, they start at 40vCPUs and 12vCPUs for memory-optimized systems and accelerated computing systems respectively. It indicates highly advanced computation capabilities and might look too much when viewed from a pricing angle.

However, it is important to remember that the memory-optimized and accelerated instances of Google Cloud have superior memory to offer. Here are some selected instances/VMs for cloud-pricing comparison of computing.

On-demand pricing

Google Cloud and AWS are somewhat comparable in pricing for systems that carry out their operations on general-purpose and memory-optimized Cloud.

The difference in price between AWS and Azure is unimportant for their different compute-optimized cloud instances. Contrarily, Google Cloud has the highest price in this service due to its scalable processors and fully functional turbo performance.

The price that Google Cloud has put in place for memory-optimized and accelerated-computing instances is a lot higher. This is because they do not have 4vCPUs like AWS or Azure. In place of 4vCPUs, they provide 40vCPUs and 12vCPUs respectively.

Discounted pricing

All cloud providers give off discounts to customers when they commit to use their on-demand instances for a year or more than a year. AWS recognizes it as “Reserved Instances” (RI). Azure calls it “Reserved Savings” whereas Google Cloud refers to it as “Commitment Price”. Discounts like this motivate businesses to focus on a preset level of usage for a particular period, expecting a return for a discounted hourly rate on a few instances and VMs.

To compute discounted pricing with AWS, Azure, and Google Cloud, we’ve advised a one-year commitment time frame with no starting cost.

Note:

Presently, AWS has three different reserved instances to offer its customers: Standard RIs, Convertible RIs, and Scheduled RIs. These RIs are different from one another because of their type of RI plan. The big three cloud vendors offer a three-year commitment plan to businesses that have the motive of running for a long time. It is evident that Azure and Google Cloud offer 3-year commitment plans that are comparable to AWS, yet AWS provides a fixed average discount of 40% for all 1-year commitment plans no matter the instance type.

Google Cloud has the highest on-demand pricing of memory-optimized instances, but its 1-year commitment price is the lowest when placed side by side with AWS and Azure. This is due to the reason that Google Cloud provides a 1-year commitment to memory-optimized instances on two categories––vCPUs/hour and GBs/hour used individually based on the requirement.

Google Cloud is low-priced when compared to AWS and Azure for computing optimized cloud-based instances. It’s more costly than others when it comes to the instance types of accelerated computing.

Also, the general-purpose instances for AWS and Azure are comparable for 1-year committed/reserved plans.

Per second pricing

Per second billing - AWS

In 2017, AWS made some announcements on the possibility of per-second charges on EC2 Linux-built instances and EBS volumes. Today, per-second billing is still significant and has been employed in other services as well to a certain degree. However, there’s no formal comment on second-wise charges for Windows, RHEL, or SLES. You can catch numerous users in developer communities saying their AWS services are billed each second for Windows.

Some people believe that it might be a bug, and some speculate it might be a test by AWS. Nevertheless, AWS has not made any official notice that confirms any of the theories. Although, AWS has given an official statement that each partial instance that is consumed in an hour by a consumer will be invoiced per second for all Linux instances. Have in mind that per-second billing is regarded with a minimum 60-second limit.

This per-second billing relates to on-demand pricing plans for companies in supported regions with AWS instances zones.

Per-Second Billing: A Comparative Study

Understanding how different cloud providers charge for their services is essential for any software engineer. Let's delve into the per-second billing practices of Azure and Google Cloud, and explore how this approach impacts developers and businesses.

Azure's Approach to Per-Second Billing

• Introduction in Late 2019: Azure began offering second-wise charges without long-term commitments since late 2019.
• Not for All Instances: Azure's per-second billing is not available for all instances and mainly focuses on container-based instances.
• Billing Every Minute: Despite the per-second approach, many instances are still billed every minute.
• Focus on Containers: Microsoft's decision to focus on containers is due to their belief that per-second billing is more suitable for containerized environments.

Google Cloud's Journey to Per-Second Billing

• Evolution from Per-Hour to Per-Minute: Google Cloud initially billed per hour, then shifted to per minute, similar to AWS.
• Following AWS's Footsteps: When AWS moved to per-second billing, Google Cloud saw an opportunity and followed suit.
• A Better Offering than AWS?: Google Cloud's per-second billing is considered superior to AWS, as it is available for all VM-based instances, not just Linux-based ones.
• Enhancements in Invoicing: Google Cloud has refined their invoicing capacities to operate on the granularity of seconds, reducing the burden on consumers.

Quick Fact

• Billing in Seconds: Instances are billed by the number of seconds. If a virtual machine operates between 30 seconds and 1 minute, it is still billed for 1 minute of usage.

Serverless Services

• Providers: AWS Lambda, Azure Functions, and Google Cloud Functions are leading serverless services in the market.
• Charging Method: These providers charge in 100-millisecond increments, aligning costs with actual computing power usage.
• Benefits for Developers: This approach allows developers to focus on coding and event triggers, while the provider handles everything else.
• Cost Savings: With serverless computing, you pay for the time your code operates, not for reserving CPU cores and RAM. This approach makes billing more aligned with actual usage, eliminating unnecessary costs.

The per-second billing strategy in cloud services is an evolving and complex subject. By understanding the different approaches and offerings from Azure and Google Cloud, developers and businesses can make informed decisions that align with their specific needs and budget. The shift towards more granular billing practices, such as serverless computing, represents an industry trend towards efficiency and cost-effectiveness that every future software engineer should be aware of.

The Battle for Cloud Supremacy: The "Big Three"

The world of cloud computing is often seen as a battleground where the "big three" cloud vendors—AWS, Azure, and Google Cloud—compete to provide the best services to their users. While other players like IBM and Oracle have entered the market, they haven't yet reached the towering heights of the leading trio.

What Sets Them Apart?

• Unique Offerings: Each of the "big three" has its distinct features and services, offering a plethora of options for businesses to select from.
• Your Preference Matters: Your choice of cloud vendor depends on your specific needs and preferences. There's no one-size-fits-all answer.
• An Unpredictable Future: The landscape of cloud computing is ever-changing. Will AWS continue to lead, or will the other two catch up? Only time will tell.

Choosing the right cloud vendor is an essential decision for businesses, and understanding the unique strengths and offerings of the "big three" is crucial. Whether you're a developer, a business leader, or someone interested in the field, keeping an eye on the trends and shifts in the cloud computing landscape will help you make informed decisions. Remember, the bottom line is not just about who's leading today, but also about who aligns best with your goals and requirements.

One Pager Cheat Sheet

• The adoption of cloud computing in companies has enabled them to grow, reduce costs and securely manage their data, with widespread predictions for 94% of internet workloads to be performed on the cloud by 2021.
• Cloud Computing offers PAYG and elastic scaling options which make it cheaper than on-premises, as well as more reliable, since the cloud provider takes responsibility for server and VM breakdowns.
• Amazon AWS, Google Cloud, and Microsoft's Azure all offer cost-effective Cloud Pricing models, including PAYG, Reserved capacity and Volume-based discounts.
• The PAYG model and various discounts and savings options offered by cloud services makes them much more cost-effective than on-premises solutions.
• We will be comparing AWS EC2, Azure, and Google VMs with 4vCPUs and comparable RAM, but note that the memory-optimized and accelerated-computing instances of Google Cloud have higher vCPUs and offer superior memory.
• Google Cloud has the highest price of on-demand pricing for memory-optimized and accelerated-computing instances, due to its 40vCPUs and 12vCPUs in place of the 4vCPUs offered by AWS and Azure.
• Full-priced cloud offerings from AWS, Azure, and Google Cloud all come with discounted commitments that can save businesses up to 40% on 1-year Standard RIs, Convertible RIs, and Scheduled RIs, as well as 3-year commitment plans, with Google Cloud being lowest in memory-optimized instances, but relatively more expensive for accelerated computing.
• Google Cloud provides the most cost-effective pricing for memory-optimized instances due to its 1-year commitment plan based on vCPUs/hour and GBs/hour used, making it more competitive than AWS and Azure for 1-year committed/reserved plans.
• AWS provides per-second billing for Linux instances with a minimum of 60 seconds limit in certain supported regions and instance zones.
• Through per-second billing, the traditional cloud providers AWS, Azure and Google Cloud are making it easier for developers to focus on their code and event triggers, by charging them in increments of 100 milliseconds.
• AWS offers volume-based discount pricing with a fixed rate for bulk orders, making it beneficial for customers who need to make large-scale or frequent usage of its services.
• The big three of cloud vendors, AWS, Azure and Google Cloud Platform, offer businesses a number of options to choose from, but the race for supremacy remains uncertain.
• Azure's Cloud pricing model offers users the ability to save money over the course of a three-year commission by adding resources on-demand and taking advantage of cost-saving features, while also reducing the risk associated with committing to a cloud infrastructure vendor backed by Microsoft.
• Microsoft's Azure provides flexible and cost effective memory-optimised offerings to users as part of its cloud pricing plans.