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451 Research Weighs Costs, Considerations of Different Cloud Options

Industry News from Cloud IT

451 Research Weighs Costs, Considerations of Different Cloud Options

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October 24, 2016
By Paula Bernier
Executive Editor, TMC

Commercial private cloud offerings from companies like Microsoft (News - Alert) and VMware provide a lower total cost of ownership when labor efficiency is below 400 virtual machines managed per engineer. But when labor efficiency is greater than that, OpenStack is the TCO winner.


That is according to 451 Research (News - Alert), which earlier this week published its Cloud Price Index. The CPI also suggests OpenStack is a better choice in terms of cost over do-it-yourself solutions.

“Salaries and labor efficiency have a disproportionately large impact on pricing, so our analysis provides a true picture of total cost of ownership, beyond the technology costs,” said Owen Rogers, research director of the Digital Economics Unit at 451 Research. “But as with any IT purchasing decision, cloud buyers need to look beyond the pricing and evaluate all the risks, such as the impact of vendor lock-in over the long term.”

451 Research says that public clouds are the least wasteful option during their lifetimes due to the fact they don’t require upfront investments, and the firm notes the private cloud is challenging in that getting the correct capacity and human and other resources just right can be difficult. However, while TCO is important, the firm notes the control and security are also very important for some customers, which as a result may find the private cloud better meets their needs.

The CPI also offers commentary on cloud administrator salaries. It reports that those paychecks have increased by about 10 percent in the past year and a half. And it says that more OpenStack engineers are expected to enter the job market in the months ahead.

“Now, for the first time, cloud buyers and vendors have transparency into a complex pricing model that takes into consideration the major factors impacting TCO, including salaries and workload requirements,” says 451 Research.



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