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Underutilisation in the Cloud leads to usage-based billing

Vendors selling cloud IT infrastructure products have seen an increase in revenue of 23 per cent year on year, a new report by the International Data Corporation (IDC) suggests.

These products include servers, storage, and Ethernet switches, among other things, and have amounted to $7.6 billion in the third quarter of 2015 (£5.32bn).

At the same time, public cloud infrastructure spending grew by 25.9 per cent to $4.6 billion (£3.2 billion), the same report suggests.

CEO of cloud server company ElasticHosts, Richard Davies, says these results highlight the problem of customers not using these services to their full potential.

“Most public cloud providers offering VM-based cloud services are charging customers for capacity that they aren't even using. According to some independent research from Vanson Bourne, businesses use just half (51 per cent) of the capacity they provision over a 24/7 cycle, but 90 per cent see over-provisioning as a necessary evil,” he says.

He goes on concluding that this trend will allow the next generation of container technology to deliver usage-based billing and true utility computing.

“As public cloud continues to becomes the de-facto choice for compute, users will greatly benefit from the next generation of container technology, which will enable true usage-based billing and flexible IT infrastructure that scales according to demand - rather than the fixed instances set by the provider. It’s time for public cloud to deliver the next generation of infrastructure to customers and bring utility computing to the present so customers can stop paying for capacity they're not using.”