Is Everything Pay-as-You-Go?

Is Everything Pay-as-You-Go?

A recent vendor product briefing during Tech Field Day 12 got me thinking about the term “pay-as-you-go”. In my line of work, I talk about public cloud a decent amount and maybe I take pay-as-you-go for granted. When I think about this term it means that as soon as I’m done with a resource, I can destroy it and no longer have to pay for it anymore. It also means that I can scale when I need to and just start paying for the new resources as I start consuming them.

Igneous Systems presented at TFD12 and provided a briefing of their “Igneous Data Service” which was a solution to provide you a content store based on S3. This solution was a managed service that provided you an S3 appliance to run in your own private datacenter. The appliance was “zero touch” meaning that all updates, and management of the appliance was handled by Igneous Systems themselves. The appliance would report health back to Igneous Systems to ensure that everything was running correctly and that no drives needed replaced or anything. It’s a pretty interesting solution if you are a service provider or can’t put your data in a public cloud solution like AWS S3.

All travel expenses and incidentals were paid for by Gestalt IT to attend Tech Field Day 12. In addition, Igneous Systems provided a gift to all delegates but with no expectations about the coverage through this blog or social media.

My issue was that this solution used a 212 TB appliance and required a one-year commitment to get started. If you ran out of storage, you could add another appliance to your service and would be billed accordingly. Igneous Systems considers this “pay-as-you-go” because you can always add more appliances and pay the difference. This mentality is even demonstrated on the front page of their website.

igneous-tfd12-1

I know that everything has to have a base scale unit. Amazon EC2 won’t let you add a half of a CPU to your instances for example. In addition, everything has to have a time scale, such as Amazon EC2 started instances are billed for a full hour. So in that sense nothing is really pay as you go, because you have to make jumps between 1 CPU and 2 CPUs and you’ll have to pay for a full hour even if you don’t use the entire hour. But with Igneous Systems I need to pay for an entire year and use 212TB increments of S3 based storage!? That seems like a stretch of the “pay-as-you-go” rule to me. This seems more like how traditional storage arrays are purchased.

I asked another question of the Igneous Systems team which was “Do your customers treat this as an operational expense or a capital expense?” I was told that their customers see this as an operational expense due to how flexible Igneous Systems works with the customers. See the video here: http://techfieldday.com/video/igneous-systems-hyperscale-management-with-jeff-hughes/

So I Ask You

Where is the line that gets drawn when you determine something is “pay-as-you-go” vs buying a solution in increments? In Igneous Systems’ mindset, their customers have so much data, that a 212 TB increment as the base unit is small enough to meet this requirement. Is that a fair assessment? You decide.

I’d love to hear your feedback in the comments.

3 Responses to Is Everything Pay-as-You-Go?

  1. Hi Erik

    Thank you for the comments. Pleasure meeting you at TFD12.

    Our first iteration on pay-as-you-go is based on the following logic.

    When you get started or are experimenting in the cloud, the on-demand prices let you spin up and down as needed. When you actually start running your app in the cloud, you switch to a longer term contacts (reserved instances on a yearly basis) to achieve the best pricing.  

    In a similar view, Salesforce always quotes in $/month but you will notice they always bill annually.

    At Igneous we are bridging the traditional infrastructure view with the on-demand view. In the traditional world, you have to purchase 3 years upfront – if the experience is bad, you are stuck. Therefore all purchases are heavily scrutinized and new technology is difficult to explore without a large commitment and high risk. We picked a year because it gives customers time to use the system and at the end of the year, they have no further obligation.

    In addition, many customers we talked with did not want the pay per month billing at the initial cost point of under 40K.

    Still early days and we always appreciate the feedback.

    Best
    Christian Smith
    VP/Product
    Igneous Systems

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