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About the chart: Comparison of EC2 Compute General Purpose bundles for the Linux OS and for US-East region. The chart above compares Amazon Web Services (AWS) pricing for EC2 Compute Services for the General Purpose Bundle. The pricing is post April 2014 pricing revision by AWS which saw a 40-60% cut over its prior pricing. AWS also provides much higher processing power and SSD storage, along with cheaper block storage capabilities for failsafe and components protection, than what it provided in prior editions. We believe the competition between AWS, Microsoft, and Google has only gotten hot. Customers would win surely. The measurement unit used by AWS for EC2 Compute Services is "Number of Instance Hours ". If you

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want to know what your bill is likely to be, you need to forecast your number of instance hours. Once you know the number of instance-hours, you can figure out what service type is best suited for you and get to know your EC2 compute capacity. AWS offers spot pay as you go pricing for on-demand instance hours. It also offers reserved instance hours for an upfront fee but a lower pay as you go hourly pricing than the on-demand pay as you go hourly pricing. AWS also offers two types of reserved pricing for medium usage and for high usage. It further offers the reserved pricing for two types of contract lock in periods - 1 year and 3 years.  

2014  Cloud  Pricing  White  Paper  

Shiva  Badruswamy  President,  MobileForce  Inc.  

 

MOBILEFORCE  INC  10900  NE  8th  Street,  Suite  1000,  PMB#  140    Bellevue,  WA  98004  

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What does this pricing design mean for an SMB? This pricing design by AWS means an SMB has to determine if an on-demand pricing strategy is beneficial over a reserved pricing strategy and within the reserved pricing strategy, whether to reserve the medium usage bundle or the high usage bundle. Our analysis of AWS' latest pricing can help SMBs learn a bit about how to model the instance hours and choose the right bundle. Please do remember that the EC2 Compute is only a part of the pricing and bill that you would pay AWS. To have a more accurate picture, we would have to know the region where your cloud server is to be hosted, your applications' compute power and storage needs, the operating system required, and other add-on services you need to stabilize your applications. We can only do this via a structured consulting engagement and a thorough understanding of your cloud needs. Conclusion: As you can see above, the pricing efficiency changes as instance hours change. Therefore it is pretty important to be dynamic in your pricing strategy and adjust pricing to changes in compute needs. This can save an SMB a bundle in fees paid yet optimize the compute and storage power required.

Lessons and readouts from the chart: - After 4200 instance-hours, on-demand pricing gets progressively more expensive than 12-month contract lock in reserved pricing bundles - After 5100 instance-hours, on-demand pricing gets progressively more expensive than 36-month contract lock in reserved pricing bundles as well - After 4200 instance-hours, once you have decided to switch over to a reserved pricing, the Reserved High Usage 1-year contract lock in bundle is better than the Reserved Medium Usage 1-year contract luck in bundle. - After 7500 instance-hours, once you have decided to switch over to a reserved pricing, the Reserved High Usage 3-year contract lock in bundle is better than the Reserved Medium Usage 3-year contract luck in bundle. - After 12500 instance-hours, once you have decided to switch over to a reserved pricing, the Reserved High Usage 3-year contract lock in bundle is better than the Reserved Medium Usage 1-year contract luck in bundle. - After 21000 instance-hours, once you have decided to switch over to a reserved pricing, the Reserved Medium Usage 3-year contract lock in bundle is better than the Reserved Medium Usage 1-year contract luck in bundle. After 37500 instance-hours, once you have decided to switch over to a reserved pricing, the Reserved High Usage 3-year contract lock in bundle is better than the Reserved High Usage 1-year contract luck in bundle.  

How can MobileForce consulting help? MobileForce consultants understand cloud compute and hosting environment thoroughly and can help plan your pricing budget based on your forecasted compute power and storage needs. We can help design a dynamic pricing tool that can take advantage of multi region hosting pricing arbitrage and minimize procurement of add-on protection and integrity features such as the micro instances bundle. Please contact us right away by using one of the ways on the home page if you need to engage us for your pricing computation and analysis needs.