The public cloud is losing some of its luster

Cloud CSC Blogs

We can argue until the cows come home about when to use a private, hybrid, or public cloud. Public clouds appeal to CFOs, who love their low prices and elasticity. But now we know public cloud prices can go up – and things aren’t quite so rosy anymore.

We’ve gotten used to the idea that there’s only one way public cloud service prices can go, and that’s down. For years now, the only news you heard about pricing for the big three public cloud services – Google Cloud Platform, Amazon Web Services, and Microsoft Azure – was how they were low, getting lower, and so-and-so now had the lowest prices.

That was then. This is now.

Last month, Microsoft blogger Aidan Finn revealed that pricing for Azure in the Euro Zone would increase by 13%. Further, Australia Azure users were getting a price-hike of 26%.

It turned out it wasn’t just Azure. Finn also reported that Microsoft was going to increase the price of its Software-as-a-Service (SaaS) offerings in the European Union. Most Office 365 services went up by 10%. At the same time, August 1, CRM Online’s price was going to increase by 10%, and Microsoft’s Enterprise Mobility Suite’s price would jump up “by a whopping 26%.”

Indeed, “Cloud prices are being revised for new and renewing contracts billed in Euro, Danish krone, Norwegian krone, Swedish krona, Canadian dollar and Australian dollar.”

Suddenly the public cloud doesn’t look quite so attractive, does it?

Until recently, if you were a public cloud user, you didn’t worry about expanding your services. Did you need 200 more servers? Just put it on the corporate credit card and spin them up somewhere out there in the ether. After all, the price was low now, and it was only going to keep getting lower, right? Of course!

Here’s the sad truth. There’s no such thing as a free lunch. Eventually public cloud prices were going to go up.

Now, in this particular case, Microsoft claims it’s increasing its prices because of currency fluctuations. If you’ve been following the sad story of the Greece debt crisis, you know why the Euro is weak. I’m not so sure why Microsoft is raising its cloud prices in non-Euro-using countries.

But really, that’s beside the point. This isn’t about Microsoft. Eventually, all the public cloud providers will raise their prices. It’s called capitalism.

Now, if you don’t want to tie your company’s IT costs to a third party, no matter how tempting their prices might look at the moment, you should consider the alternatives. With the cloud, you have two.

First, you can just bring keep everything in-house or bring it back in. Yes, you’ll have to pay for your cloud data center’s infrastructure, staff and power. But at least you’ll have far more control over those costs.

Next – and the more I work with the cloud the more I like this plan – is to use a hybrid cloud. Yes, you’ll still need to sink money into your own servers and data center, but when you really need it, you can pull down compute and storage from a public cloud.

I think going hybrid is the best of both worlds. And as for public, you might want to point out to your CFO that if you put all your eggs in one basket, you really should own the basket.

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