ElasticHosts CEO claims his firm's usage-based billing can vastly undercut Amazon, Google cloud services

Richard Davies says his firm's usage-based billing system could cut cloud costs by over 50 per cent

Cloud services offered my major players like Amazon Web Services and Google are inefficient and the lack of flexible scaling they offer means sometimes customers are being charged double what they should for usage.

That's according to Richard Davies, CEO and co-founder of cloud server and hosting provider ElasticHosts, which has launched a new service it claims could cut the bills of current Amazon customers by over 50 per cent by charging only for the servers that are actually used, rather than billing by the stack - something he says means customers are often overcharged.

"With an Amazon or any of the big cloud providers, you start with an 8GB server, some of the time you'll be using it all, some of the time it won't be fully used - overnight, weekends - so your 8GB server might only be using 2GB of RAM at that time," he told Computing.

"In the current world of cloud you are still billed for 8GB - you've asked for an 8GB server and every hour you'll be charged for the 8GB whether you're using 100 per cent or five per cent."

Davies explained how ElasticHosts' ‘elastic containers' enable server use to expand and contract as needed, providing customers with a more efficient service that could cut costs by over half.

"We've built a product that is still cloud servers, still on-demand, billed by the hour - or even 15 minutes," he said.

"But the key difference is every 15 minutes when the billing goes it measures and bills you the usage, not the size. So if you've got that 8GB server and on a heavy traffic day you'll be billed for the 8GB, in the night you might be billed for two, and that is a massive efficiency improvement and cost saving."

Davies argued that this set-up provides a much better deal than major cloud infrastructure providers, such as Amazon and Google.

"Even those people, with their scale and the price reductions they announced, there is still a massive inefficiency in that they're billing you because the server is on even though some of the time it's not doing much. And by having this usage-based billing we can save 50 per cent for customers," he said, adding "none of these other people has a way of measuring and accurately billing your real use".

Computing asked Davies if ElasticHosts could therefore provide a more efficient service than Amazon or Google.

"Yes because when you run a cloud server with someone like Amazon or Google, each individual server is a fixed sized box - if it's an 8GB server you'll always be billed for 8GB but equally they can't scale that server beyond 8GB," he explained, pointing out how the likes of AWS can provide more servers, but they need to be set up.

"They can start extra servers for you or you can ask them to shut it down and get a bigger one instead, but what we're talking about here is something different where the individual server is scaling up and down to something you need."

Ultimately, Davies argued, cloud providers are providing the service in the wrong way.

"What this is about from our point of view is us saying our view of the cloud should be scalable and flexible," he said

"We think that there's a major failing in all the existing products from the major players: they aren't scalable and flexible in that if you set up an 8 gig server it won't scale itself, you'll always pay for 8GB if it's not used," Davies said.