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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The cloud transformation journey: Great expectations lead to a brave new world

It's easy to think of cloud adoption as a one-time event – you choose a cloud and you consume that cloud, and the rest is history – but realistically, for most enterprises this is an incremental and iterative process. Traditional refresh cycles drive periodic purchases of new hardware and updates of software – for cloud, rapidly growing feature sets and on-demand consumption require frequent reassessment of the venues and technologies that best meet changing enterprise needs. No one wants to move providers all the time – enterprises naturally try and optimize what they already have; providers that are best at accommodating them are likely to have the most loyal customers.

Our cloud transformation journey model shows the enterprise cloud cost experience over time. We identify the cycle of cloud consumption – migration and implementation, cost-savings and cost-increases, governance and optimization, and transformative value. The ups and downs of this experience and the time required to realize value vary by company and by application; with experience and automation, the amplitude of the curve flattens and the time to value shortens. And then it starts all over again. It represents the costs payable at each stage of the enterprise journey to value-adding 'utility' IT. Read the full report here.

The Cloud Transformation Jorney
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Webinar July 20th: The Economics of Serverless Computing

Serverless is more than just hype; it has the potential to revolutionize the way we develop, build and operate applications in the cloud. Understanding the economics of serverless technology is vital to understanding its role in the world and its longer-term potential to disrupt the industry. In this webinar, Owen Rogers, Research Director for Digital Economics at 451 Research, will review these economics, pit the TCO of serverless against traditional virtual machines and containers, and compare pricing across the big four providers, namely AWS, Google, IBM and Microsoft.

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Has AWS Won the Cloud?

There is no denying that AWS is the dominant public cloud provider at the moment. Does creating differentiation give other IaaS vendors, hosters, and private cloud and colocation providers a chance to compete tomorrow, and what does this mean for the choices end-users make today?

Please join Research Director Owen Rogers and Research VP Al Sadowski for a webinar on November 16th, where they will use Cloud Price Index data to connect the dots between customer requirements and best execution venues, as well as highlight where service providers should compete or cooperate with the hyperscale providers, by exploring:
• Is there room for more hyperscale providers?
• How important are open source solutions such as OpenStack going forward?
• TCO of public, private or hybrid cloud options
 

There is no denying that AWS is the dominant public cloud provider at the moment. Does creating differentiation give other IaaS vendors, hosters, and private cloud and colocation providers a chance to compete tomorrow, and what does this mean for the choices end-users make today? This webinar will use Cloud Price Index data to connect the dots between customer requirements and best execution venues, as well as highlight where service providers should compete or cooperate with the hyperscale providers, by exploring:

¬∑         Is there room for more hyperscale providers?

¬∑         How important are open source solutions such as OpenStack going forward?

¬∑         TCO of public, private or hybrid cloud options

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Brexit: the danger of 'holidaying' your app abroad

Analyst: Owen Rogers

Britain's vote to leave the EU has sent shock waves across the world, with markets plummeting globally and uncertainty rife among investors. For cloud consumers, those at most risk are those that are located outside the US but that have chosen to consume cheaper US resources in an on-demand fashion. This is a fairly common scenario considering the US is, on average, 3% cheaper than the EU and up to 45% cheaper than Latin America. For preproduction or test/dev applications, on-demand enables experimentation without commitment, and a cheap location allows this to take place without the expense of hosting locally.

End users that have paid up front or made commitments in local currencies are most protected because the provider will take the brunt of currency fluctuations. However, those that buy resources as they need them are exposed to daily changes in currency markets, and these changes are not trivial. On the day of the referendum, £1 would buy 18.5 hours of a US small virtual machine based on Cloud Price Index data; today, that same pound will only buy 16 hours.

Will things get better? We dearly hope so; these may be short-term fluctuations. But in the longer term, new trade agreements and data legislation will have some impact on end users' access to global cloud services. This impact will also hit all other MSPs and vendors. The British public (and it appears its politicians) is as confused as anyone about what the future may hold. Ultimately, time will tell.

Learn more about our Cloud Price Index here.
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