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If you missed Part I - start here.
Is a Cloud Broker right for you? A Cloud Broker by definition is an entity that manages the use, performance and delivery of cloud services, and negotiates relationships between cloud providers and cloud consumers. As cloud computing evolves, the integration of cloud services may be too complex for Cloud consumers to manage alone. A Cloud Broker can also be in a unique position to collect, analyze and conduct opportunity assessments on pricing that will be key to a multicloud or Cloud Arbitrage strategy.
Generally, cloud arbitrage is the practice of taking advantage of a price difference between two or more Cloud providers for the same product: striking a combination of matching Cloud deals that capitalize upon the imbalance, the cost savings being the difference between the market prices at which the Cloud product unit is traded.
The challenge is that this imbalance can also disappear quickly as Cloud providers are continually adjusting pricing and changing product generations and feature sets over thousands of product types, so arbitrage opportunities are likely to be transient and short term. It is a sophisticated undertaking to keep track of and typically requires the service of a Cloud broker and related Cloud services partner to assist as a proxy to help the enterprise navigate opportunities for Cloud service arbitrage.
A Cloud Broker is not a requirement, however. An AWS or Azure partner can be used to help you navigate the myriad product and pricing considerations. There are literally thousands of product line items with AWS, add to this Azure and GCE, as well as others, and you have a daunting task to run the analysis to determine opportunities for cost savings or new technologies or better performance between providers at any given moment.
For instance, AWS has an option to subscribe to Amazon Simple Notification Service (Amazon SNS) notifications to get alerts when prices for the services change. AWS prices change periodically, such as when AWS reduces prices, when new instance types are released, or when new services are introduced. The AWS Price List Service API (AKA the Query API) and AWS Price List API (AKA the Bulk API) enable you to query for the prices of AWS services using either JSON (with the Price List Service API) or HTML (with the AWS Price List API), so you have an option to programmatically extract and analyze products and pricing dynamically as needed.
In addition, AWS and Azure have different prices on a region-by-region basis. You may pay 50% or more based simply on what part of the world you’re in. To make things more interesting, Azure will match AWS pricing for comparable services.
Further compounding the pricing complexity is the fact that deploying workloads to the Cloud requires more than a single server, plus storage (often bundled, sometimes not depending on the type) and network and other necessary services to meet the total application needs. While the enterprise can discount for reserved instances with a multi-year commitment, as the case with AWS and Azure, the trend remains that Cloud prices continue to drop, and you must exercise caution when making financial commitments.
Evaluating the various Cloud services offered by Cloud providers is also not as straightforward as one might assume. Consider the following when comparing providers:
- Actual performance, as measured by an objective benchmarking process.
- Class or size of a Cloud service
- CPU technology and chip generation
- Service specifications
- Storage technology and configurations
- Underlying technology and data center and network architecture
- Value-added services, e.g. support, managed services, add-on value-added services.
Understanding Cloud service pricing is a science in itself and this is only going to grow in complexity. Cloud providers continuously roll out new versions of existing services, add completely new services, and constantly employ new pricing strategies targeted toward achieving a competitive advantage against other providers.
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