One of the more frustrating things about cloud computing services is trying to figure out what things actually cost. Most cloud computing providers cloak the true cost of their services in a myriad number of fees. Usually, the cost of a server appears fairly attractive. But then customers discover high charges for network bandwidth and security fees. In effect, many cloud computing providers are offering the servers as bait in the hopes of making serious profits on other services and fees that customers can't do without.
The problem with this approach is that customers get wise to it pretty quickly. The end result is that they tend to shy even further away from putting production applications in the cloud because, over the long haul, they know cloud computing will be more expensive than if they hosted the applications themselves. So while there are some major benefits to cloud computing in terms of husbanding limited capital resources, the industry as a whole is doing customers and themselves a disservice by trying to nickel and dime them for every little thing.
The good news is that the folks at OpSource, a provider of cloud computing services, have come to recognize this as well. The company today announced at the Cloud Connect show that it will bundle networking and hardware-based security with its cloud computing service. According to Keao Caindec, senior vice president and chief marketing officer for OpSource, the pricing models used by most cloud computing providers are "kind of ridiculous." The reason many customers are wary of cloud computing service platforms is that there is no real understanding of the total cost of the service.
In the meantime, cloud computing providers are already engaged in a price war that takes the form of a reduction in the price of some service or fee every 30 days or so. Rather than making it about pricing, the cloud computing providers need to really come up with better ways of defining the quality of a service relative to its cost. Otherwise, they're engaging in a tit-for-tat price war that just conditions everybody to assume that all cloud computing services are relatively equal. If that's the case, the industry might as well just get on with the inevitable consolidation that seems to have already begun with Verizon's acquisition of Terremark.