ability. If a customer really needs five-nines of uptime, a 10% discount is not
going to even come close to the cost of
lost revenue, breach of end-user service levels, or loss of market share due
to credibility issues.
Another trick the service providers
play on their customers is to compute
the SLA on an annualized basis. This
means that customers are only eligible
for a service credit after one year has
passed. Clearly the end user should pay
close attention to the details of the SLA
being provided and weigh that against
what business impact it will have if the
service provider misses the committed
SLA. From what we have seen in the last
four years of providing IaaS and PaaS,
most customers do not have a strong
understanding of how much downtime
their businesses can tolerate or what
the costs are for such downtime. This
creates a carnival atmosphere in the
cloud community where ever higher
SLAs are offered at lower prices without the due diligence needed to achieve
them…another race to the bottom.
Taking advantage of the low prices
of Cloud 1.0 requires an honest assessment by the end customer of the level
of reliability they actually need.
Performance is almost never discussed. One of the hazards of shared
infrastructure is that one customer’s
usage patterns may affect other customers’ performance. While this interference between customers can
be engineered out of the system, addressing this problem is an expense
that vendors must balance against the
selling price. As a result, repeatable
benchmarks of cloud performance
are few and far between because they
are not easily achieved, and Cloud 1.0
infrastructure is rarely capable of performance levels that the enterprise is
accustomed to.
While it makes intuitive sense to
quiz the cloud provider on the design
of their infrastructure, the universe
of possibilities for constraining per-
formance to achieve a $0.03/hour in-
stance price defies easy analysis, even
for the hardware-savvy consumer. At
best, it makes sense to ask about per-
formance SLAs, though at this time we
have not seen any in the industry. In
most cases, the only way to determine
if the service meets a specific applica-
tion need is to deploy and run it in pro-
duction, which is prohibitively expen-
sive for most organizations.
the advent of cloud 2.0:
the Value-Based cloud
The current myopic focus on price has