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With Amazon's recent price spikes, do you expect the cost of cloud computing to increase?
Bids for spot instances have soared to more than ten times their original amount, in many cases. Is this an isolated couple of instances that may have to do with Amazon's being unclear about their bidding system, or do you see this as a larger market trend?
Best Answer
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- Lauren Buchsbaum
Prices will go up however the quality of service, service levels and associated capabilities should also go up. I was with a cloud backup service provider and about a year ago switched to a different provider that ended up costing more. I could switch back to what I was using which would be less expensive, however I would lose functionality and incur lower productivity. Thus, the higher price service along with its capabilities is the better value.
Clouds have had as a value proposition low cost, however going forward there will remain the low cost players as there are in most any industry, and then there will be the value along with premium services. For some things low cost or free will be applicable, for others it will be value the return on innovation the new ROI of what value and benefit can be derived from using a given service.
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Related Activity
Prices always shake out as a new market matures. Amazon and other cloud vendors are obtaining valuable information about the underlying costs of these services, and in some cases things will go down, and in others things will go up. Sometimes they go up to help margins or subsidize some other area, and sometimes they go up because of the realities of providing the services.
While I do think that some costs will go up, I do see that it will not impact all use cases, and there is still a value proposition for the cloud that includes cost. That's not the only proposition, nor even the best one in many cases. Flexibility is greater in the cloud, and these cost changes are not likely to undermine that in any significant way.
We'll have to see how much of a trend it becomes, beyond the normal price balancing that inevitably takes place in any maturing market.
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