Contrary to popular belief, prices for cloud services generally do not drop over time. Instead, new services, or new generations of existing services, are introduced at lower unit costs.
In fact, this is the primary price reduction mechanism for most major cloud providers.
Making sure you are benefitting from each new service or service generation is an important step in maintaining a cost-efficient Cloud Architecture. With thousands of services available on most cloud platforms, keeping track of new services is a time-consuming task.
Why is "checking for updates services" important?
We recommend you review your cloud estate once every 3 months, and see if there are new services, or new service editions available that offer some of the following benefits.
Lower Prices on New Generations
Look for pricing benefits that match your consumption model: New generations of existing services often come with lower Pay-as-you-go pricing. In terms of reservation discounts, newer generations often offer much higher discount rates.
An example of VM pricing across 3 generations of D-series VMs with 2vCPU and 8GB of Memory,
all in Western Europe:
As you can see, keeping up with each generation is a good way to save money.
How do I benefit from Moore's law in cloud?
In the cloud prices generally do not drop. Rather new generations are introduced at lower prices. This is why you need a quarterly tune-up to ensure you get the most out of your budget.
New Price Models Become Available
Not only do new generations of services often mean lower prices, they also tend to open up new price models altogether. This is particularly prevalent on AWS. Here new editions may now be eligible for reservations, which the previous generations were not. In other cases, new editions may now allow for more flexible ways of paying for reservations, i.e. no up-front payment.
An example would be ElastiCache on AWS, a service most of our AWS customers use. Here older service family generations like r3 or r4 only offer the legacy reservation type “HeavyUsage” with 50% up-front fee, whereas the latest generation r5 offers “No Upfront” pricing, where – as you might have guessed from the name – there is no up-front fee.
Better Specifications on New Editions
Higher performing, newer processors, more included storage, access to higher tier external storage, better networking performance, these are all things that come with new editions of services. But, there are sometimes tradeoffs, and understanding what the technical changes to a service are from generation to generation is an important part of deciding whether to upgrade to the latest edition.
An example would be the move from 1 virtual CPU per core to virtual CPU per thread – not something you would suspect, if you didn’t read the technical specifications. Most of the time, this has zero real world impact, and the new service can be adopted – it is, however, one of the things you should check for, when you are conducting your quarterly review of which services to upgrade to the newest generations.
Better Fit Features
Services are often introduced with the highest tiers of gold-plating in terms of redundancy etc. Even though you may not use this high tier of feature on other services, you’ll have no choice on specific services. New editions open up the opportunity for lower-tier features.
A good example of this is the recent opportunity to reduce retention and availability for back-up of SQL Server Managed Instances on Azure. Until recently, back-up was only available in the highest tier of redundancy – far exceeding the redundancy or availability choice taken by the majority of our clients. Now, however, you have a choice, and can reduce the availability of back-up storage to match your other services. Savings? Up to 50% or more.
By reviewing your existing service and resource portfolio regularly – we suggest quarterly – you can get lower prices, lower overall cost, better performance, and better specifications.
Don’t forget, however, as you change your environment, you will need to be sure to re-balance your reservations and license choices.
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