Story image

The war on cloud pricing: Object storage moves into the mainstream

24 Apr 2017

The latest analysis on cloud pricing by 451 Research highlights that the cloud price battle field has shifted from virtual machines (VMs) to object storage.

And the firm predicts that other services, particularly databases, will undergo the same pricing pressures over the next 18 months.

451 Research says that virtual machines have been the traditional battleground for price cuts as providers seek to gain attention and differentiation. But now, the tide has turned as object storage pricing declines, including a drop of 14% over the past 12 months.

For comparison, the cloud mainstay of virtual machines has dropped a relatively small 5% over the same period.

The analysts believe that the move of price cuts beyond compute is due to market maturity.

Other factors include increasing cloud-native development and faith in the cloud model, as well as a competitive scrum to capture data migrating out of on-premises infrastructure.

“The big cloud providers appear to be playing an aggressive game of tit for tat, cutting object storage prices to avoid standing out as expensive,” comments Jean Atelsek, analyst, Digital Economics Unit at 451 Research.

Atelsek says, “this is the first time there has been a big price war outside compute, and it reflects object storage’s move into the mainstream. While price cuts are good news for cloud buyers, they are now faced with a new level of complexity when comparing providers.”

The cloud storage battle started in Q3 2016 when 451 Research’s Digital Economics Unit identified a reduction in IBM SoftLayer’s object storage prices.

According to 451 Research, Google, AWS and then Microsoft followed suit with cuts as well.

The 451 Research Digital Economics Unit predicts that prices for virtual machines and object storage will continue to come down, with relational databases likely to be the next competitive front.

In their own words, 451 Research explains the Cloud Price Index as the industry's most rigorous analysis of the cost of cloud computing.

It explores the external costs associated with ownership of public and private cloud, including colocation, hardware and software.

It provides benchmark indicators for the costs of deploying and operating private cloud infrastructure to help service provider appropriately price their services and help end users assess and compare their procurement options.

451 Research’s latest analysis outlines that in the cloud price war, cloud storage has become the new battleground as the market sees a shift from virtual machines (VMs) to object storage. 

Platform9 and Intersect partner to bring unified cloud to A/NZ
“For Intersect, Platform9 represents the single most strategic solution to a set of challenges we see expanding across the board."
Gartner: AI to reduce project management workload
80% of the work performed project management teams will be taken over by AI by 2030, starting this year.
How Virtustream enabled FMC to modernise its global IT operations
As a result of transforming its IT operations, migrating mission-critical applications to the cloud and implementing a new SAP S/4HANA environment, FMC expects to realise significant cost and time savings. 
Meet the future of women in IT
Emily Sopers has just won Kordia’s first ever Women in Technology Scholarship, which was established to address gender imbalance in the information and communications technology (ICT) sector.
Microsoft Teams’ eight new and upcoming features
After taking Best in Show at Enterprise Connect, Microsoft Teams will be seeing eight new capabilities over 2019.
OutSystems and Boncode team up for better code analysis
The Boncode and OutSystems alliance aims to help organisations to build fast and feel comfortable that the work they're delivering is at peak quality levels.
Vector penalised $3.5 million for excessive levels of power outages
''Given the impact electricity outages have on consumers and businesses it is crucial that lines companies have systems in place to identify and manage the risks present in their networks."
Digital spending to hit US$1.2 trillion by 2022
A recent study by Zinnov shows that IoT spend reached US$201 billion in 2018 while outsourcing service providers generated $40 billion in revenue.