As more large enterprises adopt Azure cloud, especially those that have traditionally used Microsoft tools, we have observed growing interested in Microsoft Azure Enterprise Agreements, commonly known as EAs. We thought it would be useful to understand more about Microsoft EA’s, how they work with Azure, and what they mean to both the enterprise and the ISV.
What is an Azure Enterprise Agreement?
While you can create an Enterprise Agreement with Microsoft specifically for Azure, most companies using this option already have an EA in place for use of their software assets like Windows, Office, Sharepoint, System Center, etc. If you have an EA for other products, then you can simply add Azure to that existing agreement by making an upfront monetary commitment. You can then use eligible Azure cloud services throughout the year to meet the commitment. And you can pay for additional usage beyond the commitment, at the same rates. So, like any Enterprise License Agreement (ELA), including AWS’s EDP, you are committing to a contract term and volume to gain additional discounts.
According to Microsoft, the Enterprise Agreement is designed for organizations that want to license software and cloud services for a minimum three-year period. The Enterprise Agreement offers built-in savings ranging from 15 percent to 45 percent based on committed spend – and given how these commitments typically work, it is likely that the more you buy, the better your discount. The minimum listed commitment for an EA is 500 more users or devices for commercial companies (250 for public sector), and they specifically state this minimum does not apply to Server and Cloud Enrollment, an offering aimed at companies with EAs in place to help them standardize on Microsoft server and cloud technologies.
As it turns out, the Azure Enterprise commitment minimum is very low. You are required to make an upfront monetary commitment for each of the three years of the agreement, with a minimum order value of one “Monetary Commitment SKU” of $100 per month ($1,200/year). This low commitment make sense: once an enterprise is on a cloud platform, it’s sticky – land and expand is the name of the game for Azure, AWS, and Google. They expect infrastructure to grow significantly beyond the minimum, and just need to get a foot in the door. And of course,the starting point on the cloud is supposed to be much cheaper and flexible than on prem infrastructure.
Benefits of an Azure Enterprise Agreement… Beyond Pricing
There are certain Azure-specific EA benefits besides just price to entice users to move off of Pay-As-You-Go. You can create and manage multiple Azure subscriptions with a single EA. You can also roll up and manage all your subscriptions, giving you an enterprise view of how many resource minutes you’re using per subscription. In addition, you can assign subscription burn to accounting departments and cost centers so you can more easily manage budgets and see spend at various roll up levels.
EAs give you access to certain features that you’d otherwise be required to purchase separately. For example, an Azure EA gives you the option to purchase Azure Active Directory Premium, which will give you access to multi-factor authentication, 99.99% guaranteed uptime, and other features. Pay-As-You-Go only gives you access to the free version of Azure AD.
Besides getting the best pricing and discounts, what are some of the other added benefit an EA might provide to an enterprise:.
- A common IT platform deployed across the organization.
- Minimal up-front costs and the ability to budget more effectively by locking in pricing and spreading payments over three years.
- Flexibility to choose from Microsoft cloud services, on-premises software, or a mix of both and migrate on your own terms.
- Simplified purchasing with predictable payments through a single agreement for cloud services and software.
- Managed licensing throughout the life of your agreement with the help of a Microsoft Certified Partner or a Microsoft representative.
Now, for vendors like ParkMyCloud, that need Azure pricing data to perform our service, how are we affected by the EA? Not adversely: the good news is that Microsoft makes EA pricing available through dedicated APIs and/or the Azure Price Sheet. We can match this information to a customer by using their Offer ID which defines their EA subscription and corresponding pricing (discounts).
How Else Can You Save Money on Azure?
Whether an Azure Enterprise Agreement makes sense for your organization is up to you to decide. Luckily, it’s not the only way to keep Azure costs in check. Here are a few others to explore:
Earlier this year at the Google Cloud Next event, Google announced the launch of its new managed service offering for multi-cloud environments, Google Cloud Anthos.
The benefits of public cloud, like cost savings and higher levels of productivity, are often presented as an “all or nothing” choice to enterprises. However, with this offering, Google is acknowledging that multi-cloud environments are the reality as organizations see the value of expanding their cloud platform portfolios. Anthos is Google’s answer to the challenges enterprises face when adopting cloud solutions alongside their on-prem environments. It aims to enable customers to evolve into a hybrid and multi-cloud environment to take advantage of scalability, flexibility, and global reach. In the theory of “write once, run anywhere”, Anthos also promises to give developers the ability to build once and run apps anywhere on their multi-cloud environments.
Anthos embraces open-source technology
Google Cloud Anthos is based on the Cloud Services Platform that Google introduced last year. Google’s vision is to integrate the family of cloud services together.
Anthos is generally available on both Google Cloud Platform (GCP) with Google Kubernetes Engine (GKE) and data centers with GKE On-Prem. So how does Google aim to deliver on the multi-cloud promise? It embraces open-source technology standards to let you build, manage and run modern hybrid applications on existing on-prem environments or in public cloud. Moreover, Anthos offers a flexible way to shift workloads from third-party clouds, such as Amazon Web Services (AWS) and Microsoft Azure to GCP and vice-versa. This allows users not to worry about getting locked-in to a provider.
As a 100% software solution, Anthos gives businesses operational consistency by running quickly on any existing hardware. Anthos leverages open APIs, giving developers the freedom to modernize. And, it automatically updates with the latest feature updates and security patches, because is based on GKE.
Rapid cloud transformation from Anthos
Google also introduced Migrate for Anthos at Cloud Next, which automates the process of migrating virtual machines (VM) to a container in GKE, regardless of whether the VM is set up on-prem or in the cloud lets users convert workloads directly into containers in GKE. Migrate for Anthos makes the workload portability less difficult both technically and in terms of developer skills when migrating.
Though most digital transformations are a mix of different strategies, for the workloads that will benefit the most, containers, migrating with Anthos will deliver a fast, smooth path to modernization according to Migrate for Anthos Beta.
Streamlining multi-cloud management with Anthos
Another piece of the offering is Anthos Config Management, which lets users streamline confirmation so they can create multi-cluster policies out of the box, set and enforce secure role-based access controls, resource quotas, and create namespaces. The capability to automate policy and security also works with their open-source independent service for microservices, Istio.
The management platform also lets users create common configurations for all administrative policies that apply to their Kubernetes clusters both on-prem and cloud. Users can define and enforce configurations globally, validate configurations with the built-in validator that reviews every line of code before it gets to the repository, and actively monitors them.
Expanded Services for Anthos
Google Cloud is expanding its Anthos platform with Anthos Service Mesh and Cloud Run for Anthos serverless capabilities, announced last week and currently in beta.
The first is Anthos Service Mesh, which is built on Istio APIs, is designed to connect, secure, monitor and manage microservice running in containerized environments, all through a single administrative dashboard that tracks the application’s traffic. This new service is aimed to improve the developer experience by making it easier to manage and troubleshoot the complexities of the multi-cloud environment.
Another update Google introduced was Cloud Run for Anthos. This managed service for serverless computing allows users to easily run stateless workloads on a fully managed Anthos environment without having to manage those cloud resources. It only charges for access when the application needs resources. Cloud Run for Anthos can run workloads on Google Cloud on on-premises and is limited to Google’s Cloud Platform (GCP) only.
Both AWS and Azure have hybrid cloud offerings but are not the same, mostly for one single reason.
AWS Outposts brings native AWS services, infrastructure, and operating models to virtually any data center, co-location space, or on-premises facility, in the same operating idea as Anthos, using the same AWS APIs, tools, and infrastructure across on-prem and the AWS cloud to deliver a seamless and consistent for an AWS hybrid experience.
As an extension of Azure to consistently build and run hybrid applications across their cloud and on-prem environments, Azure Stack delivers a solution for workloads wherever they reside and gives them access to connect to Azure Stack for cloud services.
As you can see, the main difference is that both AWS Outposts and Azure Stack are limited to combining on-premises infrastructure and the respective cloud provider itself, with no support for other cloud providers, unlike Anthos. Google Cloud Anthos manages hybrid multi-cloud environments, not just hybrid cloud environments, making it a unique offering for multi-cloud environment users.
AWS offers a number of discount options for their cloud resources, of which one of the more interesting is AWS spot instances. Spot instances offer an alluring discount for spare capacity – but of course, this purchasing option can’t be used the same way as on demand infrastructure. Here are seven things you should know about AWS spot instances, which may help you decide whether or not you should be using them.
1. What Spot Instances Are
AWS spot instances are not a specific type of instance – rather, this is the name of a purchasing option that allows users to take advantage of spare capacity at a low price, with the possibility that it could be reclaimed for other workloads with just a two minute notice. If the price goes above your maximum set price, your workload will also be interrupted.
This means that workloads need to be specifically designed for fault tolerance, though AWS claims that spot instances are interrupted less than 5% of the time. With spot instance hibernation, interrupted instances need not be terminated. Rather, they can be essentially paused, with the memory saved to the root EBS volume, then reloaded when the machine is resumed.
2. Best Practice: Spot Fleets
Spot Fleets are collections of instances, including Spot Instances and optionally On Demand instances. When provisioning a spot fleet, you can set a target capacity for the fleet, and the request will be fulfilled if there is available capacity.
AWS recommends Spot Fleets as a best practice. One reason is that you can use fleets to request multiple instance types simultaneously – which not only increases the likelihood that your request is filled, but can mitigate cost risks by setting a maximum cost per hour for the whole fleet rather than a specific spot pool (group of instances with the same instance type, operating system, availability zone, and network platform).
3. When to Use AWS Spot Instances
Since Spot Instances are interruptible, you’ll need to limit your usage of them to fault-tolerant workloads.
Time critical workloads should have instances be automatically replaced, either by restarting workloads on a new instance, or for production websites, send users to a different instance using a load balancer.
Common use cases for spot instances include:
- Batch processing
- Web services
- CI/CD development
- Hadoop data processing
- Image rendering
- Big data analytics
- Machine learning
- Video transcoding
- Massively parallel computations
AWS recently announced that spot instances will now be available in US GovCloud regions, putting them available in 21 regions and 66 availability zones. They’re only available for EC2 instances.
If you’ve read any older (pre-fall-2017) articles about Spot Instances, you’ll see a lot of talk about bidding strategies and spikes in pricing. AWS seems to have listened to customers’ complaints that this system was confusing, and in response, they changed the pricing mechanism in November 2017. Now, spot instance prices do still adjust based on trends, but these trends are longer term and gradual. There is no bidding function. Instead, you pay the spot price that’s in effect for the current hour, with the option to set a maximum price you are willing to pay.
6. Savings Potential
To compare current savings over on demand pricing, you’ll want to visit AWS’s spot instance advisor. A quick check shows savings largely in the 70-80% range for Linux OS and in the 40-50% range for Windows OS, with a few instance types showing anomalies at 0% savings.
For longer-running systems, reserved instances or on demand instances with on/off schedules may be better, so you should evaluate the savings rate for all three based on the workload.
When determining whether this amount of savings will be worthwhile, remember to consider any labor costs of building and maintaining your application to tolerate interruptions.
7. How AWS’s Option Compares to Other Clouds
It’s always worth considering how the major cloud providers approach similar offerings. Comparable to AWS spot instances, Microsoft Azure has low priority VMs while Google Cloud offers preemptible VMs. As the names of both of these offerings highlight, they, too, are interruptible instances offered at a discount.
There are a few main differences to highlight. Both Azure and Google offer fixed discounting structures, offering clarity and predictability on pricing. Google’s offering is a bit more flexible, with no limitations on the instance types. On the other hand, Azure users report issues with scaling to large numbers of VMs, with many VM types having limited availability. You also must launch in Batch/Scale Sets, with no option for an individual VM.
Should You Adopt an AWS Spot Instance Strategy?
Whether you adopt an AWS spot instance-focused strategy depends on your workloads, your application, and your expertise. But if you can address the issues of fault tolerance, then most likely, yes: the savings from spot instances will be worth your while.
After reviewing the fiscal earnings report for 2019 and the most recent quarterly report from June for the ‘big three’ cloud providers, we thought it was time to take a closer look at the Alibaba Cloud market share. Looking at the numbers, it’s obvious that AWS is still number one overall, but other cloud service providers are not trailing far behind.
Alibaba is at the top of the market in Asia, and dominating in China with cloud revenue up 66% year-over-year. While Alibaba is in the top 5 CSPs worldwide, they still have a lot of plans for the future to maintain this growth and continue to move up. Here’s the deal with Ali Cloud and why it should not be overlooked in 2019.
Note: a version of this post was originally published in May 2018. It has been completely rewritten and updated for 2019.
Alibaba Cloud at a Glance
Following Amazon’s AWS, Google Cloud, and Microsoft Azure, AliCloud is making headlines of its own after they released their latest quarterly revenue and full fiscal year 2019 reports:
To see how much the Alibaba Cloud has grown, here are the 2018 headlines we gathered last year:
Here’s what Alibaba’s 2019 annual reports tell us:
- Cloud computing revenue grew 66% YoY in the most recent June quarter to $1.134 billion.
- For 2019, Alibaba’s annual cloud revenue reached $3.68 billion for the full fiscal year, an 84% increase from last year.
- In comparison, AWS growth was at 45 percent for the same period, and Azure was a surprising 64% YoY – the lowest it’s been in years.
- However, Alibaba’s cloud revenue can’t quite compare with the $30 billion and $33.7 billion generated for 2019 by AWS and Microsoft Azure, respectively.
- Alibaba Cloud, or Aliyun as some call it, accounts for 7% of Alibaba revenue. For comparison to the other big cloud + retail giant, AWS accounts for 13% of Amazon revenue.
- According to IDC, Alibaba Cloud has grown by 76% annually to hit $1.51 Billion in revenue.
Ali Cloud’s Market Presence
Alibaba is growing its market presence, not only with a firm hold over Asia, but also securing a spot as one of the top 5 cloud providers worldwide. Synergy Research Group reported Q2 2019 cloud market share numbers: Amazon 33%, Microsoft 13%, Google 8%, IBM 6%, and Alibaba 5%. Although Alibaba ranks lowest among the top five, they show consistently steady, upward growth, and land only a hair shy of catching up to IBM at 6 percent.
While AWS has a third of the total market share, Alibaba is holding onto a whopping 47.3% of China’s cloud computing market share. Out of all the China cloud providers, Alibaba is clearly in the lead with the biggest market share. According to Canalys findings, the closest competitor Alibaba Cloud has is Tencent Cloud who holds 15.4% of the China cloud market share. AWS comes in third holding 8.8% of the cloud market share in China.
So far this year, they have opened a second data center in Japan, as well as Indonesia. With the two data centers in Japan, AliCloud will offer 50+ services, such as elastic computing, image search, database, networking, disaster recovery, and storage services. These services can cater to key sectors.
Not only is Alibaba Cloud expanding their cloud footprint in the Asia-Pacific, but they have also recently expanded their reach to offer services in Brazil. They are focused on the bigger picture and continuing to increase their presence in the global marketplace. The company is growing at a rapid rate thanks to an increase in average revenue per customer. Alibaba is currently operating at a global scale in 55 availability zones across 19 regions around the world.
Not only is Alibaba expanding the number of data centers, but they also launched over 300 new cloud services during the June 2019 quarter. These include products and features that are related to core cloud offerings, security, AI applications, and data intelligence. On top of that, Alibaba also caught attention when it was named Salesforce’s exclusive provider in China. In an effort to expand their SaaS offerings, Alibaba cloud announced their SaaS Accelerator program. The goal of the SaaS Accelerator is to enable a seamless integration of SaaS offerings for vendors running on Alibaba Cloud.
We have seen that they are the public cloud provider that has shown the most YoY growth and Aliyun is proving that they are a force to be reckoned with and are showing no signs of slowing down anytime soon.
What People Are Saying
John Dinsdale, chief analyst and research director at Synergy Research Group, says “While not all cloud providers have released their Q4 numbers yet, it is quite evident that Alibaba growth has once again outpaced overall market growth”
Daniel Zhang, CEO of Alibaba Group, says “Our growth is driven by the power of Alibaba’s cloud and data technology that helps expedite the digital transformation of millions of enterprises.”
“The growth, evolution, and operating margin profile of Alibaba’s cloud services are following, and should continue to follow, the same path. At present, AWS represents only about 1/9th of Amazon revenue but generates over 60% of its operating profit. There is little reason to believe that Alibaba’s cloud business will somehow veer off trajectory and be different,” said John Freeman, equity analyst at CFRA Research.
“Alibaba’s advanced, secure infrastructure and knowledge of these markets will empower our global customers with a solution that meets local business needs,” said Salesforce, Alibaba’s newest strategic partner.
Alibaba Cloud Market Share – 2019 and Beyond:
So as we continue to see Alibaba cloud market share growth, could they be the next big cloud provider in 2019? Will they jump into the ‘big three’ or will it become a ‘big five,’ including IBM market share? What we know for sure is that we can expect more growth, and that’s a good thing for all of us because growth drives competition, innovation, and better offerings for all. The cloud market is constantly changing, so while we continue looking at AWS, Azure, Google, and IBM in the next year, we’ll also be keeping an eye on Alibaba Cloud to see what they bring to the table.
It’s unlikely that Alibaba will be keeping up with AWS, Azure or GCP in the United States anytime in the near future. We’ll keep up with the changes in the cloud market to see if this changes.
When evaluating public cloud providers, whether to choose the best for your environment or simply to try to decipher the disparity in market share, it can be easy to get hung up on the differences. AWS, Microsoft Azure, and Google Cloud each have their own service catalog, pricing and purchasing variations, and flavor. But do these differences actually matter?
What’s Actually Different Between Cloud Providers?
Let’s take a look at some of the differences between the various cloud providers.
First up is terminology. At first glance, it may seem like the cloud providers each have a unique spread of offerings, but many of these products and services are quite similar once you get the names aligned. Here are a few examples:
Obviously, this is not a sign of substantive differences in offerings – and just goes to show that the providers are often more similar than it might appear at first glance.
Though we are able to align comparable products across AWS, Azure, and Google Cloud, there are of course differences between these offerings. In fact, with the number of products and services available today (we’ve counted 176 from AWS alone), comparing each is beyond the scope of this single blog post.
For our purposes, we can compare what is still the core product for cloud service providers: compute. Compute products make up about ⅔ of most companies’ cloud bills, so the similarities and differences here will account for the core of most users’ cloud experiences.
Here’s a brief comparison of the compute option features across cloud providers:
Of course, if you plan to make heavy use of a particular service, such as Function-as-a-Service/serverless, you’ll want to do a detailed comparison of those offerings on their own.
That covers functionality. How do the prices compare? One way to do this is by selecting a particular resource type, finding comparable versions across the cloud providers, and comparing prices. Here’s an example of a few instances’ costs as of this writing (all are Linux OS):
For more accurate results, pull up each cloud provider’s price list. Of course, not all instance types will be as easy to compare across providers – especially once you get outside the core compute offerings into options that are more variable, more configurable, and perhaps even charged differently (in fact, AWS and Google actually charge per second).
Note that AWS and Azure list distinct prices for instance types with the Windows OS, while Google Cloud adds a per-core license charge, on top of the base instance cost.
The table above represents the default On Demand pricing options. However, each provider offers a variety of methods to reduce these base costs, which we’ll look at in the Purchasing Options section below.
Comparisons of the myriad purchasing options are worth several blog posts on their own, so we’ll keep it high level here. These are the most commonly used – and discussed – options to lower costs from the listed On Demand prices for AWS, Microsoft Azure, and Google Cloud.
Each of the major cloud providers offers a way for customers to purchase compute capacity in advance in exchange for a discount: AWS Reserved Instances, Azure Reserved Virtual Machine Instances, and Google Committed Use discounts. There are a few interesting variations, for example, AWS offers an option to purchase “Convertible Reserved Instances”, which allow reservations to be exchanged across families, operating systems, and instance sizes. On the other hand, Azure offers similar flexibility in their core Reserved VM option. Google Cloud’s program is somewhat more flexible regarding resources, as customers must only select a number of vCPUs and memory, rather than a specific instance size and type.
What about if you change your mind? AWS users have the option to resell their reservations on a marketplace if they decide they’re no longer needed, while Azure users will pay a penalty to cancel, and Google users cannot cancel.
Spot and Preemptible Instances
Another discounting mechanism is the idea of spot instances in AWS, low-priority VMs in Azure, and preemptible VMs, as they’re called on Google. These options allow users to purchase unused capacity for a steep discount. The cost of this discount is that these instances can be interrupted (or perhaps Azure puts it best with their “evicted” term) in favor of higher priority demand – i.e. someone who paid more. For this reason, this pricing structure is best used for fault-tolerant applications and short-lived processes, such as financial modeling, rendering, testing, etc. While there are variations in the exact mechanisms for purchasing and using these instance types across clouds, they have similar discount amounts and use cases.
Sustained Use Discounts
Google Cloud Platform offers another cost-saving option that doesn’t have a direct equivalent in AWS or Azure: Sustained Use Discounts. This is an automatic, built-in discount for compute capacity, giving you a larger percentage off the more you run the instance. Be aware that the GCP prices listed can be somewhat misleading, as a sustained use discount is already built in, assuming full-month usage – but it is nice to see the cloud provider looking after its customers and requiring no extra cost or work for this discount.
A last sort of “purchasing option” is related to contract agreements. With all three major cloud providers, enterprise contracts are available. Typically, these are aimed at enterprise customers, and encourage large companies to commit to specific levels of usage and spend in exchange for an across-the-board discount – for example, AWS EDPs, Azure Enterprise Agreements. As these are not published options and will depend on the size of your infrastructure, your relationship with the cloud provider, etc., it’s hard to say what impact this will have on your bill and how it will compare between clouds.
Revenue & Market Share
As of earlier this year, AWS still dominates public cloud market share at 47%, while Azure and Google trail at 22% and 7% respectively. AWS quarterly sales are at least $7.7 billion – while Microsoft and Google avoid reporting specific numbers for public cloud but instead lump it in with other services, making revenue impossible to compare (other than an assumption that, yes, AWS is beating them.) Both report growth and their market share seems to be on the rise as well.
Does this matter? In some ways, yes. There’s a positive feedback loop in which larger enterprises will be more inclined to go with the solution that is serving the most large enterprises. And, AWS’s many-year head start and market advantage have let it develop more, and more innovative, offerings at a rapid pace. But ultimately we do not find the market picture to have any impact on functionality or availability.
It’s worth mentioning that you may also need to consider whether or not your organization competes with the cloud provider’s other lines of business. For example, many retailers specifically choose to avoid using AWS because they compete directly with Amazon. However, for most organizations, this is not an important factor to consider.
There’s also just the pure perception of the differences between cloud providers. Many folks perceive Azure as a bit stodgy, while Google Cloud seems slick but perhaps less performant than AWS.
Some appreciate AWS and Azure’s enterprise support and find Google Cloud lacking here, but this is changing as Google onboards more large customers and focuses on enterprise compatibility.
There are also perceptions regarding ease of use, but actually, we find these to be most affected by the platform you’re used to using. Ultimately, whatever you’re most familiar with is going to be the easiest – and any can be learned.
Do the Differences Matter?
On some of the factors we went through above, the cloud providers do have variations. But on many variables, the providers and their offerings are so similar as to be equivalent. If there’s a particular area that’s especially important to your business (such as serverless, or integration with Microsoft applications), you may find that it becomes the deciding factor.
And… that’s okay! The fact of the matter is, you’re likely to be using multiple clouds soon, if you’re not already – so you will have access to the advantages of each provider. Additionally, applications and data are now more portable than ever due to containers.
So, prepare yourself and your environment for a multi-cloud reality. Build your applications to avoid vendor lock-in. Use cloud-agnostic tools where possible to take advantage of the benefits of abstraction layers.
Even if you’re only considering one cloud at the moment, these choices will benefit you in the long run. And remember: if your company is telling you to use a specific cloud provider, or an obscure requirement drives you to one in particular – don’t worry. The differences don’t matter that much.