IAAS CLOUD PRICING OVERVIEW
Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform are the three main providers for Infrastructure-as-a-Service (IaaS) offerings, also commonly known as public cloud. As this space continues to grow and more organizations begin to strategically adopt public cloud into their technology stack, each of these providers are competing aggressively to win over market share. As a result of the intense rivalry, players in this space often adjust their pricing to try to win competitive advantages over the other players.
This 2021 IaaS Annual Pricing Report provides updated details and insights on IaaS market pricing, along with the best practices in mitigating pricing-related risk and driving a successful deal outcome with these providers in the following sections:
1. IaaS Market Overview
To help IaaS buyers better understand the similarities and differences between the main IaaS providers, this section provides a consolidated comparison table that highlights key deal areas, such as contract types, commonly used term lengths, discounting behavior, service credit options, and support offerings.
2. IaaS Pricing Comparison
One of the main differentiators between AWS, Azure, and Google's service offerings is how the cloud solution is priced. This section compares the three most common cloud solution pricing structures (General Instance Pricing, Compute-Optimized Pricing, and Memory-Intensive Pricing) for each vendor and details how customers can achieve additional discounts to further reduce their unit costs for cloud consumption.
Though understanding how these pricing structures stack up is important in comparing each of these vendors, it does not mean that providers cannot improve their costs in effort to win over new business. IaaS suppliers provide baseline discounts for large, multi-year cloud commitments, commonly in the form of spend tier discount thresholds. This section provides a practical example of how to achieve additional savings on-top of these baseline discounts to further reduce cloud spend by using a best practices approach to an IaaS negotiation.
3. IaaS Top Risks & Tactics
IaaS providers commonly manipulate their product proposals and enact aggressive sales tactics to maximize costs for the customer. This section details solutions for the most common risks and sales tactics IaaS buyers need to be aware of to mitigate long-term financial exposure and drive deal success for all future deals with their IaaS providers, which include:
IaaS Over-Commitment: Learn how over-committing today can lead to massive fees and an inability to reduce your commit down the road.
IaaS Vendor Access to Critical Deal Information: This section provides a solution to combat critical information leaks that sales teams can use to their advantage to reduce buyer leverage and sway negotiation outcomes in their favor.
IaaS Renewal Increases: Though IaaS cloud providers don't typical provide renewal protection concessions in their agreements, IaaS customers can use the strategy from this section to help mitigate future price increases.
IaaS Marketplace Purchases: Find out how making additional purchases through your IaaS provider's marketplace portal can result in higher prices for third party software.
IaaS Support Costs: This section explains why not discussing support options and costs with IaaS cloud providers ahead of time leaves buyers open to purchase risk.
IaaS Vendor Lock-In: Learn how to avoid vendor lock-in, which can negatively impact your negotiation position and ability to achieve competitive discounting.
To increase your chances of achieving higher discounting and reducing costs, this report will introduce organizations on how to leverage competition and combat commonly used sales tactics to facilitate movement on the bottom line of their IaaS deals. If you are interested in understanding what discount your organization should be achieving, contact us to speak to an IaaS subject matter expert and assess your current pricing against your industry peers.