How pricey are the hyperscalers' Internet of Things offerings?

Lead Researchers: Owen Rogers, Research Director - Digital Economics Unit, and Christian Renaud, Research Director - Internet of Things

451 Research recently published its Technology & Business Insight: The Economics of IoT report, which compared the pricing models and costs of the cloud IoT offerings of three leading hyperscalers – AWS, Google and Microsoft. 451 Research Voice of the Enterprise IoT survey respondents identify these three large public cloud providers as the leading IoT platform vendors.

To discover these results was no simple task. Costs related to AWS IoT Core, Google IoT Core and Microsoft Azure IoT Hub are structured so differently that manual cost comparisons are almost impossible. Even where pricing models appear simple, subtle differences can have significant cost implications.

For instance, one hidden element that affects cost is that each provider has its own definition of what constitutes a message. Some IoT platforms do not charge for 'keep alive' messages of just a few bytes, while others do. In fact, some cloud providers round up small messages such as this to the nearest kilobyte. This results in a 64-byte 'ping' message being charged for 17 times the capacity.

To account for these differences and complete their analysis effectively, the analysts carefully identified nine pricing parameters that have a bearing on the cost of the hyperscaler cloud IoT platforms. The parameters still led to millions of permutations where one provider would be more cost-effective than the next. The only approach was to price all possible combinations and understand the differences using machine-learning techniques.

The analysts constructed a Python simulation that performed 10 million comparisons of US pricing. Each simulated scenario had a randomly selected configuration of the nine price-impacting parameters. Resulting data was then fed into an analytics platform that produced a Chi-square automatic interaction detection (CHAID) decision tree. The tree revealed which combinations of the parameters drove which provider (AWS, Google or Microsoft) to be the cheapest with a predictive strength of 96%.

Overall, the 451 Research Digital Economics Unit's methodology deduced that Microsoft Azure is the cheapest at scale, but AWS is the least expensive IoT provider for deployments of less than 20,000 devices that each send an average of three messages or fewer at under 6KB a minute. Google was not found to be exclusively the cheapest in any scenario.

To learn more about what factors drive the cloud-related costs of Internet of Things deployments, and in which scenarios each cloud provider has a cost advantage, register below for our webinar on June 13 at 1:00 pm ET.

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