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2Q15 Cloud Product & Pricing Update
Cloud Pricing
Google's price cuts were the most significant during 2Q15 amongst the major providers of public cloud services, when measured against RBC's array of use cases. Other 2Q15 actions included a minor change at Amazon Web Services, and price increases at IBM Softlayer and AT&T Cloud as well as (earlier) Microsoft's earlier discontinuation of its term commitment discounts.
• Google’s introduced lower rates on compute instances that drove an effective rate cut of ~18-22% when priced against our use cases.
• AWS’ pricing changes drove a minor effective rate decrease (~1%), mostly on newer and lower priced compute instances.
• IBMSoftlayer’schangesdroveaneffectiveincreaseof~11-20%,aslower RAM pricing was more than offset by higher bandwidth pricing.
• On the telco side, changes at AT&T Cloud resulted in a ~3% increase, driven by lower RAM pricing offset by higher bandwidth pricing.
Pricing levels at the other public cloud platforms remained flat during 1Q15. By way of comparison, 1Q15 public-cloud price cuts occurred at VMWare (~21%), Verizon Cloud (~45%) and CloudSigma (~19-21%), when measured against RBC’s use cases.
Product Changes
The most notable 2Q15 feature/product introductions included:
• Amazon Web Services' EC2 C4/D2/M4 compute instances (which provide greater CPU, local storage, and RAM)
• Microsoft Azure G-series cloud instances (which provide greater RAM and local SSD storage) and general availability of Azure premium storage.
• Google’s new Preemptible compute instances (which provide lower pricing than its conventional cloud product, but on a best-efforts basis).
• IBM-Softlayer’s new high performance block/file storage.
• Oracle’s newly introduced cloud services. Since Oracle’s products are currently purchasable only on a product-specific basis, and pricing and product details for its cloud compute offer are not available (or purchasable) on its Web site, we do not include it in our cross-platform pricing comparison. But on a resource-specific basis, we find that Oracle's pricing is roughly comparable to major peers on most of its
storage and bandwidth produces, but it prices at a premium on IO.
• We also noted a revamped offer at Verizon Cloud in late 1Q15, with a simplified pricing structure for storage, IO, and compute instances vs.
Verizon Terremark.
Net: 1H15 pricing and product activity has been more measured amongst the major cloud platforms, with less of the rampant discounting that we observed a year ago. The following discussion and exhibits provide greater detail on recent and historical pricing and product trends.
PublicCloud RevenueYieldperGBRAM
