From: Big Data Republic
Ioana Hreninciuc, Commercial Director, BigStep
Fears that public cloud infrastructure services might not be as economical as first thought appear well founded, following reports of business customers’ “bill shocks”. As companies set their big data budgets for 2014, it may be time to go back to the drawing board as they review provisioning options.
As 2013 gives way to 2014, many organisations will be conducting budget reviews and taking stock of spending. One of the top items on the agenda will be big data, as companies attempt to sharpen their competitive edge and position themselves for new growth.
Yet caution is needed as organisations explore the options for capturing big data and performing deeper data interrogation. There has been growing controversy in the media about the hidden costs of “cheap” public cloud infrastructure services, following some high-profile cases of businesses being hit by alarmingly high bills. What should organisations look for when planning their big data budgets for 2014?
Amazon attacked on price
Amazon Web Services (AWS) in particular has been in the spotlight for landing companies with crippling charges, including unforeseen extras. In November, US publication Business Insider reported on the demise of photo-sharing startup Everpix. Its undoing was a $35,000 monthly bill from AWS which it couldn’t pay, whilst weeks later, Belgian startup TestingBot also withdrew from Amazon’s cloud, when the monthly costs became unpalatably high.
Critics of public cloud services blame “bill shocks” on pricing strategies that have been manipulated according to behavioural economics. A common practice is to “anchor” prices with initial offers that are designed to sound cheap. These lull customers into a false sense of security that they are getting good value for the money.The catch is that shared (virtualised) resources do not perform consistently, because the loads they are bearing at any given time can vary so much. From hour to hour, day to day, week to week, the same activities can vary substantially in cost because of how the capacity is being provided (for example, using older, less efficient equipment when demand is at a peak).
Cheap doesn’t always mean value
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