Welcome!

PHP Authors: Liz McMillan, Carmen Gonzalez, Hovhannes Avoyan, Lori MacVittie, Trevor Parsons

Related Topics: Agile Computing, Containers Expo Blog, @CloudExpo

Agile Computing: Article

Scalable Pricing in a Scalable World

Nati Shalom: Need scalability in the new dynamically-scalable world? Don’t forget pricing

Nati Shalom's GigaSpaces Blog

In most discussions about scalability, we often approach the topic as a pure technical/architecture challenge, and ignore cost issues. The problem is that when we truly scale our application, and want to benefit from economies of scale, we're going to end up with scale limitations, not because of technical issues, but because of the pricing and licensing models.

In most discussions about scalability, we often approach the topic as a pure technical/architecture challenge, and ignore cost issues. The problem is that when we truly scale our application, and want to benefit from economies of scale, we're going to end up with scale limitations, not because of technical issues, but because of the pricing and licensing models.

Scalable pricing

Scalable pricing means a pricing scheme that provides the benefits of economies of scale. Below are pricing models commonly used for software products and how they fit in the new dynamically-scalable world.

  • Free - while this certainly sounds like the best option (and may very well be) the customer needs to be aware of the following:
- The free license of a software product typically does not include support: not an option for most mission critical applications.
- When you do pay extra for support, you will typically be charged just like any other run-time license on a per CPU basis.
- Make sure that the company behind the product has a sustainable business model, otherwise there is a good chance that it will either die when its funding dries up or change its license model to monetize its user base. That's fine, but all it means is that it's not really a free offering in the long run, and you don't know what the pricing model will be exactly.
- In terms of total cost of ownership (TCO), free products are not necessarily the cheapest option. TCO is dependent on many factors, for example, dependency on other products (and their license costs), the need for integration and maintenance, etc. See my post, Economies of non scale, for more on the topic.
  • Subscription model - With a subscription model you pay a fixed periodical fee, typically on an annual basis for infrastructure software, and on a monthly basis for SaaS. Subscription pricing is suitable for on-demand scalability as it provides the flexibility to grow or reduce cost based on the annual use of the product.
  • Pay per use - this model is even more flexible then subscription model as it gives you higher granularity. Pay per use is provides in various forms where the usage can be a measure of CPU utilization or bandwidth utilization. Amazon for example charge per machine utilization for its EC2 services and data-utilization for its data services.
  • Perpetual license - This model is used to buy licenses in advance and pay for support separately (normally 15-20% on top of the per CPU license). This is the most commonly used model with commercial software products, however, due to the large initial investment required by this model, it doesn't fit well with on-demand environment.
  • Enterprise unlimited license - This model enables you to pay premium price in advance (based on potential future usage) and gives you the freedom to use the software without any limit. This model fits to environment where you anticipate that over a fairly short period of time the usage of the product will become wide and therefore the pay-per use or any of the other models mentioned above will become more expensive.

Which model to choose?

Each of the models has pros and cons and therefore the answer depends on your situation. Also, over time, as the situation changes, you will probably realize you need a different license model, and so it becomes equally important that the product you choose will give you the freedom to move from one model to another in the future.

GigaSpaces scalable pricing

With GigaSpaces we continuously look into ways to make our software license cost fit the on-demand world. For example, we launched a free Start-Up program that provides a totally FREE version of GigaSpaces for startups (hundreds of start-ups have already signed up for this program since we launched it last year). We also provide a Pay-Per-Use model for those running on Amazon EC2.

We felt that even though this is a fairly flexible pricing, we could do better. As of our 6.6 release, we added the option to buy our software at a yearly subscription price, and we also launched a new package called XAP Standard Edition, which is sold at a very low price of $9,500k per package (not CPU) where the package includes two servers, 4 GigaSpaces nodes and up to 50 clients or remote servers.

These changes were designed to address the needs of developers looking to start running their applications at a relatively low scale, who need the full functionality of the product, but cannot afford the full XAP price. Another principle that we kept when we designed this package is that moving from Standard to Premium edition wouldn't require any change in your architecture or code - which means that you could always scale to the premium edition just by changing the license key.
More details about the new pricing model is available here.

 


Nati Shalom was part of the star-studded lineup of speakers that spoke at SYS-CON's Cloud Computing Expo. Between them, they covered every aspect of the hottest IT topic for years, with not just Amazon but also IBM, Microsoft, Google, Yahoo, Intel, HP and a host of others all offering, using or developing high-end computing services typically described as “cloud computing” - through which massively scalable IT-related capabilities are provided as a service using Internet technologies.

Forrester Research analyst James Staten calls cloud computing "classic disruptive innovation - where the mainstream dismisses the product and small companies have time to create a real differentiated value." But there are so many offerings just now that what infrastructure architects are looking for above all is a set of organizing principles they can use to guide them in choosing between them all.

Such principles. and a host of associated topics, were addressed in San Jose by a Top Speaker Faculty that included:

  • Dr Werner Vogels - VP & CTO, Amazon.com (Keynote)
  • Mike Feinberg - Senior Vice President, Cloud Infrastructure Group, EMC
  • Steve Herrod - CTO, VMware
  • David Bernstein - VP & GM of Network Applications Infrastructure, Cisco
  • Rob Weltman - Director of Grid Services, Yahoo!
  • Peter Nickolov - President CTO, 3tera
  • Kevin Haar - President & CEO, Appistry
  • Songnian Zhou - Co-Founder & CEO, Platform Computing
  • Patrick Harr - CEO, Nirvanix
  • Gerrit Huizenga - Cloud Solutions Architect, IBM
  • John Keagy - CEO & Co-Founder, GoGrid/ServePath
  • Sajai Krishnan - CEO, ParaScale
  • Reuven Cohen - Founder & Chief Technologist, Enomaly
  • Mike Eaton - CEO, Cloudworks
  • Jonathan Bryce - Founder at Mosso (Rackspace)
  • Nati Shalom - CTO, GigaSpaces
  • Don MacAskill - CEO & Chief Geek, SmugMug
  • Billy Marshall - Founder & CEO, rPath
  • Dr Thorsten von Eicken - CTO & Founder, RightScale
  • Jonathan Pyke - Chief Strategy Office, Cordys
  • Jason Stowe - Founder & CEO, Cycle Computing
  • David Young - Co-Founder & CEO, Joyent
  • Dave Durkee - Founder, CEO & Technical Director, ENKI
  • John Janakiraman - CTO, Skytap
  • Stuart Charlton - Chief Software Architect, Elastra
  • Lars Leckie, Principal, Hummer Winblad Venture Partners
  • Dr Rich Wolski - Professor, U.C. Santa Barbara
  • Javier Soltero - Co-Founder & CEO of Hyperic
  • Omer Trajman - Director of Field Engineering, Vertica Systems
  • Rachel Chalmers - Senior Analyst, Enterprise Software, The 451 Group
  • Alan Williamson, Founder at Blog-City.com, Creator of BlueDragon

More Stories By Nati Shalom

Nati Shalom, Founder and CTO at GigaSpaces, is a thought leader in Cloud-Computing and Big-Data Technologies. Shalom was recently recognized as a Top Cloud Computing Blogger for CIO’s by The CIO Magazine and his blog listed as an excellent blog by *technical founders* by YCombinator. Shalom is also the founder of the IGTCloud, and is a frequent presenter at industry conferences.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
In his session at @ThingsExpo, Arvind Radhakrishnen discussed how IoT offers new business models in banking and financial services organizations with the capability to revolutionize products, payments, channels, business processes and asset management built on strong architectural foundation. The following topics were covered: How IoT stands to impact various business parameters including customer experience, cost and risk management within BFS organizations.
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business - from apparel to energy - is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...
From 2013, NTT Communications has been providing cPaaS service, SkyWay. Its customer’s expectations for leveraging WebRTC technology are not only typical real-time communication use cases such as Web conference, remote education, but also IoT use cases such as remote camera monitoring, smart-glass, and robotic. Because of this, NTT Communications has numerous IoT business use-cases that its customers are developing on top of PaaS. WebRTC will lead IoT businesses to be more innovative and address...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, will introduce two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a...
SYS-CON Events announced today that Calligo has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo is an innovative cloud service provider offering mid-sized companies the highest levels of data privacy. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalized support service from its globally located cloud platform...
SYS-CON Events announced today that Elastifile will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Elastifile Cloud File System (ECFS) is software-defined data infrastructure designed for seamless and efficient management of dynamic workloads across heterogeneous environments. Elastifile provides the architecture needed to optimize your hybrid cloud environment, by facilitating efficient...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Launched in 2016, Cloudistics helps anyone bring the power of the cloud to the data center in an easy-to-use, on- premises cloud platform that automatically provides high performance resources for all types of applications: Docke...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
SYS-CON Events announced today that Golden Gate University will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Since 1901, non-profit Golden Gate University (GGU) has been helping adults achieve their professional goals by providing high quality, practice-based undergraduate and graduate educational programs in law, taxation, business and related professions. Many of its courses are taug...
SYS-CON Events announced today that Secure Channels, a cybersecurity firm, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Secure Channels, Inc. offers several products and solutions to its many clients, helping them protect critical data from being compromised and access to computer networks from the unauthorized. The company develops comprehensive data encryption security strategie...
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
SYS-CON Events announced today that SkyScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SkyScale is a world-class provider of cloud-based, ultra-fast multi-GPU hardware platforms for lease to customers desiring the fastest performance available as a service anywhere in the world. SkyScale builds, configures, and manages dedicated systems strategically located in maximum-security...
SYS-CON Events announced today that Datera will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera offers a radically new approach to data management, where innovative software makes data infrastructure invisible, elastic and able to perform at the highest level. It eliminates hardware lock-in and gives IT organizations the choice to source x86 server nodes, with business model option...
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
21st International Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Me...