CLIPPER Case Study: Google App Engine Instances are cheapest for small dollar customers

Google Cloud AppEngine is 42% cheaper than AWS EC2 and 55% cheaper than MS Azure!!

MobileForce is intrigued by the dynamics of cloud pricing set by the 3 major CSPs, Google Cloud, AWS EC2, and Microsoft Azure, to attract and retain customers. It is clear to us that each of the CSPs has resorted to pricing cloud infrastructure, promotional offers and rate discounts in different ways.  We, therefore, wanted to compare what a specific cloud instance deployment and management would cost across the 3 CSPs. To simplify things, we chose, AppEngine Instances, a realistic cloud instance scenario that has already been setup by Google Cloud as a PaaS for basic application development use types.


Cost Comparison of Comparable Google Cloud, AWS, and MS Azure Cloud Instances


Google Cloud AppEngine is a PaaS that can be used to easily set up and develop applications by simply downloading an SDK. Basic performance instance hours, storage and networking operations are bundled into the AppEngine PaaS. Our goal, then, was to identify the components of the AppEngine PaaS and then price compare by replicating the individual components in AWS EC2 and MS Azure environments. It is important to note that not all services available under AppEngine PaaS were available in MS Azure environment even though all of it was available under the AWS EC2 environment. The table below lays out the service component availability across the 3 CSPs using Google Cloud's AppEngine cloud service as a baseline. 

 

Cloud Deployment and Management Resource Consumption Assumptions

After a careful study, MobileForce designed a realistic application development consumption profile. We assumed the following for a moderate application development environment:

          MAIN SERVICE: 

               10 instances were assumed needed in a month at a 78% instance utilization rate, i.e. 5800 instance-hours required in a month, with about 7440                   instance-hours being the full 100% utilization.

          ADDITIONAL SERVICES:

  •       About 7.5 Million READ/WRITE/SMALL Storage Operations.
  •       A dedicated MemCache storage and processing capacity of 5GB per hour.
  •       A 100GB set aside for task queues and logs storage.
  •       100GB of Internet data ingress into the cloud and 100GB of Internet data egress to Americas destination
  •       100GB of general purpose storage for objects

Google AppEngine offers additional services that MS Azure does not provide. To adjust for this and normalize baseline, we assumed that these services (marked with an “N” in the table above) were not needed across all 3 platforms. The results of the study are discussed below.

Before Bill Discount Pricing: Google Cloud AppEngine Instances were by far the cheapest, coming in 28% cheaper than AWS EC2 and 43% cheaper than MS Azure Instances

 

BEFORE Discounts Fees Likely Billed By CSP

Google Cloud

AWS EC2

Microsoft Azure

Usage Fees for MAIN SERVICE

$289

$406

$510

Usage Fees for ADDITIONAL SERVICES

$19

$18

$28

Total upfront and usage Fees for ALL SERVICES

$307

$424

$539

After Bill Discount Pricing: Google Cloud AppEngine Instances came in even cheaper as the Google Cloud was the ONLY CSP that offered a bill discount for small monthly fee consumption amounts. Google’s AppEngine Instance came in 42% cheaper than AWS EC2 and 55% cheaper than MS Azure.

 

Likely Bill Discounts Applied by CSP

Google Cloud

AWS EC2

Microsoft Azure

Volume Discount on Upfront Costs

0%

0%

0%

Volume Discount on Hourly Costs

0%

0%

0%

Sustained Use Discount

21.52%

0.00%

0.00%

 

 

AFTER Discounts Fees Likely Billed By CSP

Google Cloud

AWS EC2

Microsoft Azure

Usage Fees for MAIN SERVICE

$227

$406

$510

Usage Fees for ADDITIONAL SERVICES

$19

$18

$28

Total upfront and usage Fees for ALL SERVICES

$245

$424

$539

 

ON A PER UNIT BASIS: AFTER Discounts Fees Likely Billed By CSP

Google Cloud

AWS EC2

Microsoft Azure

MAIN SERVICE Units (MSUs) Consumed

5,800

5,800

5,800

MAIN SERVICE Capacity Utilization Rate

78%

78%

78%

MAIN SERVICE Usage Fees Paid per MSU

$0.0391

$0.0700

$0.0880

ADDITIONAL SERVICES Usage Fees Paid per MSU

$0.0033

$0.0032

$0.0049

All Fees Paid Per MSU

$0.0423

$0.0732

$0.0929

 

Google Cloud AppEngine’s sustained-use discount formula works well for small dollar consumers!

Google Cloud, by structuring discounts based on instance utilization rates rather than volume of billing dollars spend is able to offer discounts as high as 22% on the already low Google Cloud rates even for small dollar consumers of cloud services. This puts Google’s AppEngine PaaS as a great starter package for application developers. Effectively speaking, on a per instance hour basis, AppEngine PaaS comes in at about 4 cents compared to 7 cents for AWS EC2 and 9 cents for MS Azure. MS Azure lacking in features and coming in higher has to restructure the services to make it more attractive to small dollar consumers, a major part of the hot growing SMB segment. Google Cloud’s AppEngine Instances, however, lack the extensive feature set that an AWS EC2 cloud service offers beyond the immediate Application Development environment. Our analysis reveals that, by far, AWS EC2 Platform has the most services available in a cloud deployment platform. If your application development is complex and requires an end-to-end approach with extensive monitoring capabilities and market places for software patches and human intelligence, we would still recommend AWS EC2 as the best option even if the per instance hour costs at 7 cents are 42% higher than the likely 4 cents with Google AppEngine. 



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Shiva Badruswamy,
May 2, 2014, 12:50 PM
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