How much does managed cloud hosting cost? If we had a pound for every time someone asked us this very question...
As you might expect, there isn’t a simple answer. Companies like Wirehive offer bespoke cloud solutions; there's no set pricing. What you pay depends entirely on what you need from your cloud infrastructure, alongside a host of other key factors. But that doesn't mean we can't give you a clearer idea. We can look at the elements that may increase or decrease the price of your cloud hosting solution, and influence the final costs.
Before we start, it’s worth clarifying the sort of thing we're talking about when we say cloud hosting.
If you're looking to get your website online and need a static server for it to sit on, then this probably isn’t for you. But, if your website needs to...
- Cope with sudden spikes in traffic without slowing down or even vanishing completely.
- Integrate innovative services, such as image recognition, chat functions, or other artificial intelligence-based services.
- Be replicated in different regions to meet the needs of a global audience.
- Ensure that, should a server fail, your site doesn’t vanish.
...then cloud hosting is an absolute must.
The alternative to cloud hosting
Cloud hosting may appear expensive at first glance. We'll explain why that isn't the case shortly, but first, we’re going to need some context. Let's take a look at the costs of a traditional, non-cloud-based hosting solution.
Assuming you want your own dedicated server - something you own and maintain yourself - then you must first consider capital and operating expenses.
Once you've bought the machine itself and paid for the relevant rack space and bandwidth, you're probably looking at something in the region of £6000 - £8000. Factor in the set-up and maintenance costs, and that could easily increase to £35,000 for a single year.
This is ridiculously expensive if all you need is a basic website. You're much better off finding a traditional, old-fashioned hosting company and paying them to put your site on a shared server. But - there's always a but - that isn't cloud hosting.
Is cloud hosting right for your business
In the cloud, your data and infrastructure is stored across multiple, interconnected servers - as opposed to a single machine. There are several advantages, including reliability, scalability, and versatility. But how do you decide if it's right for your business?
Let's assume you're looking at one of the big three to host your cloud infrastructure. That is Amazon Web Services (AWS), Microsoft Azure, or Google Cloud Platform (GCP). You also want to utilise some of the added value these services provide over and above simply getting your website online.
The first thing you must decide is which of them is going to be the best fit for your business. It used to be a truism in business when discussing hardware that no-one ever got fired for buying IBM. They were the market leader and their products were considered to be the benchmark. In terms of cloud, AWS is probably the closest approximation.
That doesn’t necessarily mean that choosing to put your infrastructure on AWS is always the best choice for your business. But that's a subject for another day. For the purposes of this article, it's enough to say that all three of the major cloud providers have various pricing tiers based on how much service you consume - beginning with a free tier at the lowest level of consumption.
So, which one is right for you? That depends on what do you want your cloud to do.
Reducing ongoing cloud hosting costs with autoscaling
Do you want your site to autoscale? By that, we mean do you want to only pay for the services your site is using but still be able to grow and shrink according to demand? That's perfectly possible, if somewhat difficult to achieve.
Your site architecture must be able to facilitate this, without causing issues for the end user. You must establish rules that ensure autoscaling happens quickly and efficiently, both upwards and back down again. In the simplest possible sense, this means that your single instance (another name for a virtual machine) becomes two, three, or four instances when it needs to. It then drops back down to one when the extra capacity is no longer required.
As you might expect this makes the running costs of the hosting platform much cheaper. The traditional alternative is to calculate the maximum capacity you might have to cope with, and pay for a server that is able to cope with demand.
Clearly, that's not the best use of your money. The downside of an efficient autoscaling system is that it is much more complicated to set up than a large, dedicated server.
An example of autoscaling
If you were using Amazon Web Services, you'd need to set-up:
- Route 53
- A load balancer
- An autoscaling Elastic Cloud Compute instance (EC2)
- A Relational Database Service (RDS)
- Simple Storage Service (S3)
You also need CloudWatch to monitor all these systems. You can estimate the cost of this using the AWS monthly calculator.
Designing and implementing that architecture correctly requires a separate, one-off cost. So, to save money on your ongoing cloud services, you'll need to spend money up-front on architecture set-up.
Architect more = spend less later.
Keeping your cloud hosting services online
Autoscaling may be the most well known feature of cloud hosting, but it's far from the only one.
As companies host more and more of their systems on the cloud, disaster recovery becomes increasingly important. It's bad enough when a simple, static site goes down. When a large and complex cloud environment vanishes, it can destroy your business.
With Microsoft Azure, you can architect it in such a way that it's able to fail over from one of their “regions” to a different region should the need arise. For the record there are currently 42 regions across the globe for Microsoft Azure, with another 12 in development.
In effect, a primary region is chosen and all traffic is routed to the services hosted in that region. Should those services (or even that entire region) become unavailable, then all traffic is routed to a secondary region instead.
Three ways to set-up Azure
- The first is to set-up one region as active and a second as passive. Should the primary region fail, the design for the second is already set-up - even if the virtual machines don't yet exist. They're created in response to the demand created when the first region fails. This is the cheapest solution, but does mean there could be significant delays while the second region comes online. We all know the impact downtime can have on a business. If your business is eCommerce or relies on cloud services to function, this might not be the best solution.
- The second way is to have an additional region not only set-up, but actually populated. You've created the virtual machines, but they won't utilise capacity unless they need to. Clearly, this will mean a larger ongoing bill than the first option as background levels of consumption will be higher. But, it reduces the risks associated with downtime. There isn’t going to be much difference in the amount of work to set this up when compared to the first option, either.
- The last option is to have multiple regions running in parallel. These regions are continuously active, with a load balancer splitting traffic between them. If one region goes offline, then the other simply takes up the slack.
Truly personalised services for your customers
Both of our examples so far have looked at some of the amazing features of cloud in terms site behaviour. But how does the cloud benefit individual customers?
Let’s say you have a well established holiday booking website. You’ve probably already got Google analytics running to ensure you can track site visits as accurately as possible, but there are many more things that Google Cloud Platform can help you with.
You may even have some form of recommendations built into your site. Something like “people who booked X holiday also looked at Y” - much like Amazon. But wouldn’t it be better if those recommendations could be based on the exact behaviour of the customer, rather than generic rules?
You’d create a scalable front end that records user interactions as pure data. You'd store that data permanently so that Google's machine learning platforms could access it as and when required. To comply with GDPR, you must be able to trace this data back to specific users before its analysed and fed back into the web platform in the form of personalised recommendations.
This sounds far fetched, but combining App Engine, Cloud SQL, and Apache Spark using Cloud Dataproc offers exactly this service - if set up correctly. You can then show recommendations to specific customers based on their browsing, as well as their booking history. You could even factor in the viewing history of users that fit the same demographic profile to provide more accurate recommendations. The possibilities are endless.
It goes without saying that a set-up like this on GCP would increase the cost of your ongoing cloud hosting services. But it also has the potential to significantly improve your profit margin.
So, how much does cloud hosting cost?
You've probably worked it out by now but, to put it simply, the more services you need the greater the price. That being said, there are two basic facts you should always consider.
Firstly, billing for cloud is done on a consumption model. This means that capital expenditure is not necessarily relevant. Owning the infrastructure to carry out these complex, innovative and reactive services would almost always work out more expensive over the lifetime of the estate.
Secondly, it's possible to significantly reduce the size of your ongoing bills by investing in high-quality, well-designed architecture at the start of the migration.
If you’d like to talk about some of the ways we've saved businesses large amounts of money by moving their infrastructure to the cloud, then please drop us a line. We’d genuinely love to hear from you.