Pricing The Cloud

Published: Mar, 2014 | Pages: 93 | Publisher: Tariff Consultancy Ltd
Industry: Telecommunications | Report Format: Electronic (PDF)

Introduction - The definition of cloud computing services for the purpose of this report

Cloud computing services for the purposes of this report are defined as providing on-demand IT services, including IT components such as virtualised CPU, RAM, storage, bandwidth and selected software applications. 

The cloud computing service is delivered over the internet and can be either a shared (public) service or a dedicated (private) service - or as a mixture of the two - as a hybrid service. 

The advantage of cloud services are that they are scalable and can be provided on a per user basis - with IT being used as a service. Administrators can monitor usage via an online dashboard, which can be used to monitor service utilisation and also enforce a Service Level Agreement (SLA). 


The development of cloud computing services 

Cloud computing services started to be introduced initially as a stand alone IT hosted service, but increasingly the concept of the cloud - with shared services in the cloud being delivered at a reduced cost - is increasingly being applied across all IT segments and is being integrated with the Data Centre, networks, mobility, apps and other hosted services. 

Cloud computing service development mirrors the development in IT services as a whole and is based on two key new trends - the widespread adoption of web access and services and the growth in virtualisation of CPU, memory and storage services. 

The two trends have reduced the cost of providing virtualised IT services and have enabled virtualised services to be distributed in all regions of the world via the internet. 

 Virtualisation - the growth of virtualisation has allowed enterprises to share IT components more efficiently at a lower cost than the purchase of dedicated hardware

 Web Access - the growth of web access worldwide and a decline in pricing has allowed enterprises to access virtualised services and applications on an on demand basis 

Other reasons for the increase in cloud computing services include workflow automation, the commoditisation of hardware, open source software, service orientated architecture and the automation of technical management. 

Cloud computing providers are entering the market for the provision of Pay-As-You-Go cloud computing services from four distinct areas including:

 IT services provision - with IT service providers IBM, HP & Dell now all offering cloud services. 
 Hosting services provision - with hosting providers such as OVH offering cloud services. 
 Professional services provision - with consulting providers such as Accenture offering cloud platforms. 
 Software services provision - with software providers such as Microsoft, SAP & Oracle offering cloud platforms - sometimes in partnership with other cloud providers (such as AWS). 
 Telecoms services provision - with telecoms providers such as AT&T, SingTel, Verizon & Vodafone offering cloud services. 

The five categories of cloud computing market entrant are shown in the Figure below:

Figure 1 - A chart showing the five types of cloud computing provider market entrant 
Source - TCL 

Telecoms providers all over the world continue to introduce cloud computing services. For example, in March 2014 Sri Lanka Telecom (SRT) introduced akaza, a new brand for SRT's IaaS platform to provide shared computing power, storage and bandwidth, offering optional firewalls and load balancing services. 

SRT also claims that it intends to introduce PaaS (Platform as a Service), SaaS (Software as a Service) and DaaS (Desktop as a Service) services in the future. 

All four types of cloud computing provider entrant are offering their own specialised expertise and skill set, which can be categorised as in the table below:
Figure 2 - A table showing the cloud computing provider types by skill set 
Cloud Computing Provider Skill set & services provided 
IT Services Provider Integrator of hardware & software with virtualisation
Hosting Services Provider Provider of web services to SMEs & hosting
Professional Services Provider Provider of SaaS on demand platforms & consultancy
Software Services Provider Offering software & middleware as a service
Telecoms Services Provider Using bandwidth assets to provide cloud connectivity
Source - TCL 

Each cloud computing provider type brings a level of expertise, but has to be augmented by skills sometimes acquired from other cloud computing provider types. For example - 

 A number of telecoms providers offering Pay-As-You-Go storage services are buying white label products from CTERA Networks 

  A number of providers are purchasing virtualisation software from VMware as the basis of their cloud computing service

 To address the SME segment providers are reselling Microsoft services such as Office365 or Hosted Exchange

 A number of software and IT integrators - such as Citrix and Accenture - are providing packaged services based on the Amazon EC2 platform (although not as an exclusive agreement)

 TCL Pricing the Cloud - Cloud computing service pricing including public, private & hybrid clouds worldwide - from the end of 2014 to the end of 2019
Table of Contents Page No.

A list of Figures included in the report 3
A list of companies included in the report 5
Methodology  6
Executive Summary 8
The main headlines of this report 10

PART ONE - Defining the cloud & the cloud services offered  11
Introduction - Definition of cloud computing services for the purpose of this report
The development of cloud computing services 
The reasons for growth of cloud computing services 
The evolution of cloud computing, public, private & hybrid clouds
Early cloud computing pricing models 
Other types of cloud computing service for the enterprise 
The different layers of cloud computing services 
Examples of new types of cloud computing services 
Key Point Summary

PART TWO - Cloud computing services & pricing models 24
Introduction - The types of cloud computing provider pricing model available
A survey of the main cloud computing provider pricing models
The development of cloud service pricing 
Public cloud computing services - The generic pricing models
Hybrid cloud computing services - The generic pricing models 
Private cloud computing services - The generic pricing models 
Cloud computing related services - Other types of service pricing 
Cloud computing pricing - Modeling the market 
Key Point Summary 

PART THREE - Key cloud computing players & cloud computing pricing 29
Introduction - The market structure for cloud computing services 
The range of cloud computing players & generic service features offered
The new types of cloud computing service features 
Commoditisation versus Specialisation for the cloud computing provider
The key Public cloud computing players - vendor survey
The key cloud computing pricing trends from the vendor survey
Key Point Summary 

PART FOUR - Pricing the Cloud - Pricing trends from the end of 2014 to the end of 2019  71
Introduction - Pricing trends, growth & forecast trends for cloud computing
The adoption levels for enterprise cloud computing services 
The growth rates & demand forecasting for cloud computing
The growth rates for cloud computing services 
Demand forecast for cloud computing services 
The Key drivers for cloud computing growth 
Pricing for cloud computing - vendor comparisons
- Bundled cloud computing pricing per hour 
- Unbundled cloud computing pricing per hour 
- Cloud computing bandwidth pricing per hour 
Pricing for cloud computing - the changes in pricing over time 
A pricing forecast for cloud computing - by region from 2014 to 2019 
TCL pricing forecast - by cloud computing segment from 2014 to 2019 
The pricing forecast assumptions made in the report
Key Point Summary - A survey of the 10 new key cloud computing services and pricing trends
TCL Pricing the Cloud - Conclusions and the key trends for future cloud computing growth

Figure 1: A chart showing the 5 types of cloud computing market entrant 
Figure 2: A table showing the key cloud computing provider types by skill set 
Figure 3: A pie chart showing traditional IT running costs (as a percentage of the total) 
Figure 4: A table showing the different IT costs - between internal IT, Managed IT & cloud computing services
Figure 5: A chart showing the different layers of cloud computing services 
Figure 6: A chart showing the key cloud computing providers by price point
Figure 7: A chart showing the generic cloud computing features from selected key providers 
Figure 8: A table showing the Amazon cloud product portfolio 
Figure 9: A table showing selected Amazon EC2 cloud computing pricing in USD
Figure 10: A table showing AT&T Synoptic Compute as a Service pricing in USD
Figure 11: A table showing the CenturyLink Cloud & Hyperscale service attributes
Figure 12: A table showing summary standard pricing for CenturyLink AppFog (in USD per month) 
Figure 13: A table showing the mix of services offered by Dell Cloud product categories
Figure 14: A table showing the optimum service pricing for Dell Cloud in USD 
Figure 15: A chart showing the different CSC IaaS cloud computing services deployed 
Figure 16: A table showing the Dimension Data Public CaaS pricing structure in the European region in USD
Figure 17: A table showing the Dimension Data Public CaaS price discounts in the European region in USD
Figure 18: A table showing the Fujitsu Cloud IaaS Public S5 service pricing in USD
Figure 19: A table showing selected pricing for Microsoft Office365 Small Business services from selected distributors worldwide per user per month in USD
Figure 20: A table showing selected Windows Azure cloud computing pricing in USD
Figure 21: A table showing selected IBM CloudLayer computing pricing Private Cloud instances in USD
Figure 22: A table showing the Google Cloud Platform pricing in USD
Figure 23: A table showing the HP Cloud Compute service pricing in USD
Figure 24: A table showing NTT Communications Cloud Computing pricing in USD
Figure 25: A table showing NTT Communications software pricing per hour in USD
Figure 26: A table showing Rackspace Hosting Cloud Computing service pricing in USD
Figure 27: A table showing Rackspace Hosting Bandwidth pricing in USD
Figure 28: A table showing PLDT Cloud service tiers & pricing in USD per month
Figure 29: A table showing Telefonica Virtual Disk Network pricing in USD per month
Figure 30: A table showing pricing for the VMware vCloud Hybrid Virtual private cloud computing service in USD
Figure 31: A table showing VMware dedicated cloud pricing in USD
Figure 32: A table showing the Verizon Terremark vCloud Express pricing in USD 
Figure 33: A table showing the Verizon Terremark Licensed Windows server pricing in USD 
Figure 34: A table showing the Vodafone Flexible Computing VM sizes 
Figure 35: A table showing an example of Vodafone Flexible Computing Flexible Instance (FI) virtual server pricing in USD
Figure 36: A chart showing the rise in forecast cloud growth for Europe & USA regions:from 2011 to 2016 (in CAGR per cent per annum) 
Figure 37: A chart showing the forecast growth in in cloud service revenues from 2014 to 2019 in millions of USD per annum
Figure 38: A table showing the Cloud Computing vendor products in the price survey
Figure 39: A table showing the per hour pricing for selected cloud computing vendors (in USD) as a bundled tariff
Figure 40: A chart showing the per hour pricing for selected cloud computing vendors (in USD per hour) as a bundled tariff
Figure 41: A table showing the Cloud Computing vendor products in the price survey:as an unbundled tariff
Figure 42 - A table showing the per hour pricing for selected cloud computing vendors (USD per hour) as an unbundled tariff 
Figure 43: A chart showing the per hour pricing for selected cloud computing vendors (in USD per hour) as an unbundled tariff 
Figure 44: A table showing the six selected Cloud Computing vendor products in the price survey: as a monthly rental tariff
Figure 45: A table showing the Monthly Rental Charges for the six selected cloud computing providers (USD per month) 
Figure 46: A chart showing the Monthly Rental Charges for the six selected cloud computing providers (USD per month) 
Figure 47: A table showing the selected Bandwidth pricing per Hour for the nine selected cloud computing providers (USD)
Figure 48: A table showing selected Bandwidth Pricing per Hour for the nine selected cloud computing providers (USD) 
Figure 49: A chart showing selected Bandwidth Pricing per Hour for the nine selected cloud computing providers (USD) 
Figure 50: A table summarising standard public cloud computing pricing per hour (in USD) 
Figure 51: A chart showing the forecast increase in public cloud computing revenues from the end of 2014 to the end of 2019 in billions of USD per annum
Figure 52: A chart showing the forecast increase in public cloud computing revenues from the end of 2014 to the end of 2019 in billions of USD per annum (by four geographical regions) 
Figure 53: A table showing the forecast increase in public cloud computing revenues from the end of 2014 to the end of 2019 in billions of USD per annum (by four geographical regions) 
Figure 54: A chart showing forecast standard public cloud pricing per hour in USD from the end of 2014 to the end of 2019
Figure 55: A chart showing forecast private cloud computing service pricing per month in USD from the end of 2014 to the end of 2019 
Figure 56: A table showing the exchange rates used in the TCL Pricing the Cloud report into converted into 1 USD