Companies over-provisioning and over-paying for cloud, claims research

By Danny Palmer
04 Sep 2014 View Comments
Concept image of a cloud question mark

Businesses are over-provisioning and paying for cloud services they don't need because it's seen as a necessary cover when deploying a cloud-based service.

That's according to research by cloud services company ElasticHosts, which surveyed 200 CIOs from around the globe. According to the findings, most businesses pay too much for cloud capacity, yet are still to achieve the peak performance they need when using services that ought to be able to scale.

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The report suggests that 88 per cent of CIOs nevertheless sacrifice peak performance in order to keep control of costs, while 90 per cent see over-provisioning as necessary to protect them against sudden, unexpected spikes.

However, despite these beliefs, half still feel cloud providers are delivering on their promises. "This research really highlights the shortcomings of the pay-by-capacity billing model," said Richard Davies, CEO of ElasticHosts, the company that commissioned the research.

"Essentially, companies are paying for space they are not using half the time because they are running with extra headroom so that they can handle peaks in performance.

"Yet at times of high demand, when arguably it is even more important that everything is working smoothly, web applications or websites will run slowly or even fail because they do not have the amount of server capacity needed," he said.

Davies argued that companies "are still thinking in terms of the old-world computing model", where over-provisioning was necessary, and have therefore transferred these views to cloud services, even though the two models "don't require the same way of thinking".

"But as the research shows, and as half of respondents recognised, cloud as we have it today really isn't truly elastic - it does not expand and retract automatically to meet demands, and it is not paid for like a utility, based on consumption," Davies continued. However, he argued, "change is afoot".

"Our question to organisations is: why would you ever choose to pay for capacity you aren't using, sacrifice performance, and eat up your systems administrator's time, when you don't need to?"

He added: "Soon, companies will be asking themselves the same thing, which will mark the end of capacity-based billing."

Earlier this year, Davies told Computing that ElasticHosts' usage-based billing can vastly undercut Amazon and Google cloud services.

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