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Does The New AWS Pricing Model Raises Questions about Cloud Vendor Lock-In?

Blog: Capgemini CTO Blog

Amazon Web Services (AWS) recently announced that it would begin billing customers by the second for its popular EC2 cloud computing service. Although the move is welcome news for many organizations, it raises new questions about flexibility and the risks of vendor lock-in.

Vendor lock-in explained

When AWS launched in 2006, customers were charged by the hour for EC2 instances. Since then, usage totaling less than 60 minutes has been rounded up to an hour, resulting in cost inefficiencies for customers.

Amazon’s per-second billing model is a clear challenge to Google and Microsoft’s per-minute billing models. But it’s also a strategic response to rising market demand for more flexible cloud computing solutions.

And that’s where vendor lock-in enters the picture.

As cloud technology vendors compete to give customers more options and services, IT organizations are starting to take a closer look at the opportunity cost of locking into a specific provider for their cloud computing needs.

Think of it like this: Buying an iPhone instead of an Android phone might seem like the right decision today. But if Google releases a new suite of must-have services in six months, your experience using those services will be more painful than it would be if you had chosen an Android device. Your decision to buy an iPhone has, to a degree, locked you into Apple services.

In essence, that’s the dilemma cloud services customers face. Amazon’s new pricing model is just another reminder of the costs associated with vendor decisions.

You can’t avoid lock-in. But you can minimize its impact

Everyone is locked into something. When you choose between AWS, Azure or even iOS and Android, you’re making a decision to tie your business (or your mobile device experience) to a specific provider and the slate of services, features and options they have to offer.

But although a level of lock-in is inevitable, you can minimize its current and future impact on your organization. The trick is to analyze your options and make smart decisions based on a set of key considerations.

Cost is always a factor in technology selection. But in this case, it’s not just the cost of the service that you need to consider. You also need to evaluate the cost of migrating to a different platform if you choose the wrong platform. So, be smart – analyze your requirements, evaluate the marketplace and make the right decision the first time.



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