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The price of cloud computing could soon rise

8/07/2015 by Sharon Shahzad


Until now, one of the huge selling points for using the cloud is its low cost. Many companies, particularly startups and small enterprises, have utilised cloud computing to their advantage, with the expense far lower than following the traditional route of having to buy software and licences, not to mention the costs of integrating it. Now, however, it seems that low costs could be about to rise, with Microsoft hiking its pricing structure and some experts predicting that other competitors to follow suit.

Although it is only Microsoft that has raised its prices so far, IBM is also understood to be making changes. Over the past decade businesses around the world have been able to slash expenses thanks to the competitive nature of the cloud; however, falling prices do not last forever and Microsoft has said that Azure cloud costs will rise in the near future. Customers in the eurozone, for example, can expect to pay 13% more for access from 1st August. This news was revealed by Aiden Finn, a Microsoft-focussed consultant from Dublin, who suggested that Microsoft’s email to customers stated concerns regarding the European currency, especially due to the problems in Greece; meanwhile, it was revealed last week that Azure’s Australian users can expect to see a 26% increase.

It is not only Microsoft that seems to be making changes; for example, it was posted last week that IBM has decided to change the structure of its SoftLayer cloud pricing. The company actually characterised the move as a price cut, with one configuration dropping by 39% from $3,600 (£2,335) to $1,900 (£1,233); however, looking deeper into the alterations, there is one area in particular that could see costs spiral. Previously a customer using a SoftLayer Virtual Server Instance at entry-level paid $35 (£23) for 5TB of outbound bandwidth. The same cost only buys 250GB of outbound bandwidth now, with 5TB shooting up to be priced at $615 (£399). IBM has been quick to suggest that most customers will see prices decline.

It is clear that prices in the cloud computing market are changing once again, and not necessarily becoming cheaper, and there are questions about whether Amazon could follow Microsoft and raise the prices on its own cloud network. The company offered huge discounts at the start of its launch, but it has been made clear recently that it won’t meet all the price slashes of its competitors as was always tradition.

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