Using multiple cloud providers could save you money

Cloud buyers can make substantial savings by shopping around for the cheapest services for each part of their Web application, a new report says.

The Cloud Price Index, released today by analyst firm 451 Research, says that instead of using a single cloud provider to deliver an application, buyers who mix services such as compute and storage from multiple providers can make substantial savings.

These savings start at 58 per cent for a small application, the report claims, while for a large application, the savings could be 74 per cent, which, over three years, equates to a total cost saving of $23,000 (£15,220) per Web application.

To determine the lowest-price mix of services, 451 Research’s Digital Economics Unit surveyed 26 cloud providers, representing 85 per cent of the US cloud market, as part of its regular quarterly pricing update. For each service within its basket of goods, 451 Research analysts chose the cheapest cloud provider and added costs of bandwidth, using data collected in October 2015.

The chart above shows the average monthly price for each of 451 Research’s baskets of goods, representing typical large and small application use cases, for both on-demand and best-case pricing. Best-case pricing takes into account savings achieved as a result of negotiation, long-term commitments or volume discounts. The chart also shows the cheapest price for delivering the whole application using a single provider and the cheapest price achievable using multiple cloud providers.

chart

“The CPI shows it is possible to achieve substantial savings by using multiple providers; however, we believe the complexity of dealing with various providers offsets any advantage at this time,” said Dr. Owen Rogers, Research Director of 451 Research’s Digital Economics Unit.