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The cloud pricing wars have entered a new phase with providers now increasingly looking to slash the amount they charge users for off-premise object storage services to lure in users.
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According to 451 Research’s latest Cloud Price Index (CPI) report, all the major cloud providers – led by IBM – have been steadily cutting the price of their object storage offerings since the third quarter of 2016, as users seek out new ways to drive down their off-premise consumption costs.
“Object storage is a good place, in the context of cloud, to put big blobs of data just while you’re working on processing them, completely unstructured and non-databased. Just throw your data on there and pick it up when you need it,” Owen Rogers, a research director working in the analyst house’s Digital Economics Unit at 451 Research, told Computer Weekly.
To compile the 451 Research Cloud Price Index, the organisation carries out a cost analysis of the cloud-based compute, storage, database and management resources needed to run a typical web server application.
The data has primarily laid bare the price-cutting antics providers employ around the amount users pay for virtual machines, but that is not the case anymore, said Rogers, adding that confidence is growing when it comes to using cloud is a major driving force behind this trend.
“Users have started to realise a lot of their costs go to things other than compute, and we’ve therefore seen the cloud providers now start to cut the price of services such as object storage too,” he said.
“This shows the market is getting more mature, that users seem to know more about what they’re doing and the market is now evolving to be about far more than just compute and virtual machines.”
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Cloud-based object storage repositories tend to be used to stow away large and growing amounts of unstructured data, with the amount users pay rising in line with the amount of content they store.
“Price cuts on object storage will be of bigger value to users than virtual machines, simply because object storage is one of those things where you chuck your data on and forget about it, but it’s always accruing and getting bigger over time,” said Rogers.
“If I think of my Dropbox experience, it’s only got bigger over time along with my recurring costs, which isn’t something we see on compute and virtual machines.”
For this reason, object storage services have traditionally served as a “cash cow” for cloud providers, meaning even with the price cuts, suppliers are likely to retain healthy margins, he said.
“Particularly as people are using it all the time, meaning providers are getting a constant stream of revenue in – but they’ve cut prices now because users have started demanding the discounts go beyond virtual machines. They’ve seen it is a cash cow for cloud providers, and they want to save money now too.”
Over the coming 18 months, Rogers said cloud users could expect to pay less for a wider range of cloud offerings, with off-premise database services likely to emerge as the next battleground for providers looking to cut their prices.
“We’re going to slowly see more cloud services become commoditised and I think the next one will be relational databases, simply because most enterprises have them already, it’s a fairly mature technology and databases are not currently particularly cheap in the cloud,” he said.