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Leave AWS? Not for easier cloud discounts

Matt Asay | May 29, 2017
If Amazon's competitors think they can win customers with better pricing, they should think again.

All sounds great and makes perfect sense, until the day comes when you realize that the original forecast was off. For whatever reason. Perhaps you have improved the performance of your infrastructure and don’t need as much resources. Unused reservations start piling up and you start bleeding money.

Nevertheless, some companies have had “good luck” with Reserved Instances. Expedia, for example, has managed to make cost awareness a part of its devops culture, pushing cost forecasting out to individual teams. Subbu Allamaraju, the company’s vice president of technology, admits that “it is a time-consuming activity for teams to partake in this exercise,” yet still critical because “we realized that the success of our cloud journey depends on being cost efficient.”

Expedia has introduced a process for figuring out how to “top off” its use of Reserved Instances, a process that is both “laborious” and ultimately imperfect: “We...end up consuming a diverse set of ever changing portfolio of instance types in each region. This makes upfront long-term planning to procure RIs impossible.” This process allows Expedia to balance developer choice against AWS discounts achieved through RIs, yet is such a bother that Allamaraju “can’t wait enough for simplified pricing models designed for elasticity and developer choice.”

Google would argue it need wait no longer.

 

Cost isn’t the driver

As Miles Ward, director of Solutions for Google Cloud, told Allamaraju over Twitter, “Imagine if all of those smart folks were busy making Expedia better rather than contorting themselves around [AWS] cloud’s restrictions?” Allamaraju was quick to counter that Expedia’s cloud costing program is much more than optimizing Reserved Instances, but Ward has a point.His primary argument? The cloud “should just be cheaper and easier.”

Google’s approach to cloud pricing includes Committed Use Discounts (still in beta), which are similar to AWS’s Reserved Instances but without the upfront fees or lock-in to a particular instance type, netting up to a 57 percent discount. But Google’s primary competitive wedge against AWS pricing has been Sustained Use Discounts. Basically, rather than planning for discounts in advance, Google automatically discounts users that run the same workloads over time. As Ward told me, “It’s fully automatic, you cannot screw it up, and no up-front payment.”

This sounds like the premise behind the cloud’s original differentiation: convenience all the way down.

And yet Expedia has stuck with AWS for those same workloads that it’s doing the RI dance to afford. Why? When I followed up with Allamaraju, he stressed that “pricing is just one aspect” of their decision matrix for cloud workloads and, apparently, not the most important. After all, if cost were the primary driver, Expedia (and everyone else) would simply default to the low-cost leader.

 

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