451 Research Introduces Cloud Pricing Codex to Help CIOs and CFOs Decipher Mystery of Cloud Computing Costs

Cloud Pricing Taxonomy Provides First Step in Understanding Strengths and Weaknesses of Infrastructure as a Service (IaaS) Offerings

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451 Research

Dec 09, 2013, 04:00 ET

NEW YORK, Dec. 9, 2013 /PRNewswire/ -- 451 Research, a division of The 451 Group, today unveiled its Cloud Pricing Codex, the first-ever cloud pricing guidebook which simplifies the complex economic landscape in determining the true costs of cloud computing services. The Cloud Pricing Codex provides CIOs and CFOs a clear roadmap on how to understand the price and value of Infrastructure as a Service (IaaS) offerings.

The Cloud Pricing Codex helps organizations tackle pricing plans that vary hugely among cloud service providers, not just in terms of virtual machines but also service bundling, billable attributes and usage metrics. It breaks down virtual machine pricing methods into a cloud pricing taxonomy that enables cloud consumers to assess the strengths and weaknesses of each pricing model. The Cloud Pricing Codex shows the classification of pricing options and bundles for a number of IaaS providers.

"In planning a Digital Infrastructure strategy, it is crucial that CIOs and CFOs assess all pricing methods available to them and fully understand each model's benefits, risks and features," said William Fellows, research vice president at 451 Research and co-author of the report. "Using the Cloud Pricing Codex enables companies to create a playbook that defines how the cloud – and its range of services, providers and models – can be fully utilized to deliver best value."

The Cloud Pricing Codex is grounded in a 451 Research survey of 53 IaaS providers that found large differences in the methods and metrics used by providers to bill consumption, as well as in the extent to which these methods are made public; only 64 percent of providers were found to publish prices online.

The Codex aims to pull back the curtain of confusion surrounding IaaS pricing, by categorizing all current on-demand, reserved and committed pricing methods into eight simple groups, with each group having its own features, benefits and considerations for both consumer and provider. This taxonomy of pricing methods allows CIOs and CFOs to better understand the options available to them, and make informed, strategic decisions based on business risk and best value. The Codex includes a breakdown that shows which providers offer which methods, so decision-makers can make simpler like-for-like comparisons without having to navigate through each provider's differing terminology and literature.

The Cloud Pricing Codex also includes a taxonomy of billing attributes which shows the breadth of cloud charges consumers can expect to see on their bill and the typical metrics used to measure this consumption, thereby alerting CIOs and CFOs to their financial obligations when using the cloud.

"Cloud computing once promised simple, usage-based charging for resources, similar to other utilities such as electricity; unfortunately, the current reality is far from this ideal," said Dr. Owen Rogers, cloud economist at 451 Research and co-author of the report. "The Cloud Pricing Codex aims to simplify a complex economic landscape so informed strategies in the development and implementation of cloud services can pursued by providers and consumers."

The Cloud Pricing Codex report is available here.

Watch 451 Research's Cloud Pricing 101 video available from the 451 Research Home Page.

Cloud Pricing Codex Webinar
Dr. Rogers and Tony Bishop, Chief Strategy Officer of The 451 Group and Co-head of 451 Advisors, will co-host an Enterprise 451 webinar on December 11 to discuss the Cloud Pricing Codex.

Webinar Details:

About 451 Research
451 Research, a division of The 451 Group, is focused on the business of enterprise IT innovation. The company's analysts provide critical and timely insight into the competitive dynamics of innovation in emerging technology segments. Business value is delivered via daily concise and insightful published research, periodic deeper-dive reports, data tools, market-sizing research, analyst advisory, and conferences and events. Clients of the company – at vendor, investor, service-provider and end-user organizations – rely on 451 Research's insight to support both strategic and tactical decision-making. The 451 Group is headquartered in New York, with offices in key locations, Boston, San Francisco, Washington DC, London, Seattle, Denver, Sao Paulo, Dubai, Singapore and Moscow.

SOURCE 451 Research