In 2017, cloud providers opened up a new front in the battle to lure customers by making a flurry of changes to their pricing plans meant to drive down costs and increase flexibility.
Cloud giants ranging from Google, Microsoft and Oracle all announced new pricing models targeted at Amazon Web Services, which in response announced its biggest pricing structure change in years.
Now, analysts are predicting that 2018 could be the year cloud providers actually make their new pricing structures and offerings simple enough for customers to understand.
New pricing models, along with a slew of new cloud product launches, that have ramped up competition between established leaders in the cloud industry have also led to widespread confusion among enterprises using the cloud in part to save money.
Enterprises are increasingly adopting hybrid and multi-cloud environments, according to industry data from 451 Research, but few are taking advantage of benefits due to the growing complexity of cloud products.
“Cloud buyers have access to more capabilities than ever before, but the result is greater complexity. It is a nightmare for enterprises to calculate the cost of computing using a single cloud provider, let alone comparing providers or planning a multi-cloud strategy,” Owen Rogers, research director for 451 Research, said in a statement. “The cloud was supposed to be a simple utility like electricity, but new innovations and new pricing models, such as AWS Reserved Instances, mean the IT landscape is more complex than ever.”
451 Research says the market opportunity for cloud providers to solve that growing complexity is ripe in the coming year.
And research firm Frost & Sullivan agrees.
In its new report, “Stratecast Predictions 2018: The Year Ahead Digital Transformation is Affecting Everything” Frost & Sullivan says 53 percent of IT leaders surveyed recently cited “managing costs to run cloud workloads” as a major challenge. More than half of surveyed respondents say they struggle to justify the cost of some public cloud workloads, according to Frost & Sullivan’s report.
The research firm is forecasting that cloud providers will address the issue “by consolidating and simplifying their own pricing tiers to enable users to better predict and compare costs.”
“Cloud providers are increasing the number and variety of cloud units they offer; and the units are not always intuitive: businesses often struggle to compare dissimilar offerings across providers to select the optimal unit,” according to the report. “This has given rise to a new market of “service brokers” that use technology and services to help businesses compare, select, optimize, and manage workloads across multiple cloud providers. In 2018, leading cloud providers will do their part to address this challenge by consolidating and simplifying their own pricing tiers to enable users to better predict and compare costs.”
