Cloud Economics – Private IaaS vs Hyperscalers

So, this is the follow up blog from Part 1 located here.

In the first blog I went over migration considerations, compatibility economics, sausage economics and Instance Based Computing.

For this blog I will focus on other areas that can make a huge difference to the economics of cloud services – especially when considering Hyperscalers against the likes on the vBridge services.

Metering Costs

This is one of the least understood components of cloud-based pricing, and its usually the one that causes the bill shock and consternation.

So, what are metering costs? Really simply they are a part of the pricing construct for quite a few cloud offerings, and they largely exist in Hyperscaler models. As always, an example speaks volumes.

Object Storage is a great example of where metering costs can make a big difference to the “ticket price”. Azure Blob, Amazon S3 or Google Cloud Storage – its all Object Storage underneath.

These products are advertised primarily as a very cost effective per GB or TB rate, and there are several flavours depending on the performance you need. What is less obvious however, is the associated metering costs that come with these products, they vary between providers but generally include additional costs across the following meters:

- Write Operations

- Read Operations

- List and Create Operations

- Data Retrieval API Operations*

- Data Write API Operations*

- All other API Operations*

- Lifecycle Transitions

- Ingress/Egress Operations

- Reporting and Analytics Operations

*Object storage uses API calls to manage your data store – so you will be making them.

The challenge is, how do you calculate what your costs will be? There are of course calculators to help you, but you won’t really know until you are using the service in anger.

An example of where metering can hurt is a customer of ours who has made use of a Hyperscaler Object Storage solution is now in a really tough spot. They no longer wish to use the service for a range of reasons, but they cannot walk away from their data. They have calculated that it will cost them in excess of $100k to extract their data – that’s a lot of money to move your data!

How does vBridge charge for Object Storage? Our model is a straight per GB rate, that’s it – no metering or additional costs. Very easy to calculate your costs, and importantly – if you want to move your data you can with no cost impact.

Network Connectivity

Having your workloads in the cloud is great, but you need to connect to them, and it needs to work at least as well as your on-premises environment.

For connectivity with vBridge, WAN connectivity is all you really need – and we have peering with most providers in NZ, certainly all the common ones. What’s the cost? Well, if you are using existing peering there is no cost – its included. Want dedicated WAN connectivity not using existing peering, we can do that, and it attracts simple monthly port costs per physical port.

Need more VLAN’s? All good, we have you covered.

No additional transit costs, ingress or egress etc. Consume as you need to.

For a Hyperscaler there are, as always, a plethora of options and associated metering costs – again with metering it can be difficult to truly understand your cost structures until you are in action. Considerations include:

- Speed or performance

- Ingress and Egress cost metering

- Redundancy

- Interconnectivity between VLANs

- Data Processing

- Connectivity options

- VPN Gateways

Simplicity and “forecastability” of your costs when it comes to network is essential.

Backup and DR

Starting with Backup and vBridge. Our services have simple integrated backup options which are built into our services. We offer “disk to disk” backups which are stored on high-speed disk in a secondary site. This allows for high-speed recovery quickly and easily, when you need it most, by default we provide 10 days of backup on disk. Fast, cheap protection for the most common issues that you are likely to face – doing some changes and want some piece of mind? Run a quick backup before you start with the click of a button and have an easy rollback option available should you need it.

For those that want more than 10 days, and for most customers they do – we offer tape archive over and above the disk-to-disk backups. Again, all integrated into the service, just select the option on the VM and its underway. The tapes are secured with a 3^rd party vault and we keep your backups for 10 years – even if you have moved on from vBridge.

More important than anything, we are with you all the way here – monitoring backups and helping you when you need us.

Data backups with Hyperscalers are obviously an option, naturally. But to deliver the same options, backups stored on an alternative site and delivery of air gapped backups (tape archive) you need a lot of work to set up, you have metering costs to contend with and you will be responsible for the whole service. Isn’t this one of the key reasons to consider the cloud – to stop having to spend time managing backups?

For DR, again we are all about cost effective simplicity at vBridge. Choose which VM’s you want replicated to an alternative site, make sure you have network connectivity available (obviously) and you have yourselves guaranteed resources and capacity ready to go. The bandwidth for replication is included – we take care of that for you.

The capability of DR services with Hyperscalers is immense, but as per many of the items I have gone over in this and the previous blog – the complexity of services will add cost, plus you need to add the same metering, egress, and transaction costs along with the complexity of the associated network services to support this model.

Operating Tools

Here at vBridge we are extremely proud of our cloud management toolset MyCloudSpace – this is a highly capable set of tools that enables you to easily manage the operations of your workloads with us. It is simplicity personified.

The volume of products and services provided by the Hyperscalers, which is fantastic by the way, becomes a real challenge when operating your environment – plus its changing all the time. The time and effort involved in keeping on top of this toolset can be a real time-consuming challenge for support teams.

Monitoring

Again, Hyperscalers have some fantastic monitoring tools and services available to consume alongside your workloads to help you understand what is happening with your environments and understanding performance metrics.

The challenge however is that these services are not included, they are an additional charge and in some cases you need to also pay for the storage of logs.

How does this work at vBridge? Well, we include this as part of the service, either through our portal MyCloudSpace – or through free reports that we provide, that for example make suggestions where you may have over provisioned services which could be costing you less by winding down resources.

Security

This is a large subject in and of itself, vBridge, like the Hyperscalers (but very few other NZ based IaaS suppliers) are ISO 27001 certified – that’s really table stakes today. But what about the basics such as firewall services?

All providers will have a firewall service available and of course varying options – the recurring theme here is how the service is charged and whether there are metering costs associated.

For vBridge, we have several firewall options, but what they all have in common is:

- Fixed price monthly costs.

- Ongoing support, maintenance and updates.

- No additional metering costs.

- Full Next Generation features and support with all models

Contrast this with firewall protection models including the following costs:

- Base firewall service (fixed)

- Data processing costs

- # of VM’s protected

Support Models

This is a big one, and its probably less about cost and more about service – but lets start with the costs.

vBridge – All support costs are included, 24 x 7, Email, Phone and online.

Hyperscalers - $0 to $1000 per unit (VM, Firewall or Network Service etc.) depending on whether you want email only vs. 24 x 7 phone support etc.

As I said, it really comes down to the service offering – at vBridge we are passionate about providing a customer centric personal service offering. When you call us, you will be speaking to localised support that will know you, your business and how important your call is. Our team are specialist providers that know our platform inside and out – you are speaking with the people that design, maintain and deploy our solutions. Its what we are famous for, will you get that same level of support from a Hyperscaler?

Summary

The point of these blogs is fundamentally that the economics of a cloud-based solution are not simple or straight forward, what may seem like an attractive sticker price will almost certainly not be the whole story.

You really need to delve deeply and truly understand what your actual costs will be. For us at vBridge, we have made a huge effort to make our offerings as transparent and simple as possible – we want to give you surety of cost and service in a simple way that does not require a degree in mathematics to understand.

This isn’t about bagging the Hyperscalers, they provide an awesome product and set of services – so much so that we are working to deliver hybrid capability through our platform – again with the goal of providing simplicity and transparency of costs. We believe that there is a real value proposition in providing these services to our customers so that they can enjoy the best of both worlds, only without the complexity and bill shock.

Give us a call and we are always happy to sit down with you and help you to cut through the complexity.