Welcome!

Web 2.0 Authors: Pat Romanski, Kevin Benedict, Hovhannes Avoyan, Tim Hinds, Melodye Mueller

Related Topics: Web 2.0, Virtualization, Cloud Expo

Web 2.0: 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 AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are configurable to any form factor or custom configuration. AIC leads the industry with nearly 20 years of ...
We heard for many years how developing nations would be able to develop mobile-phone networks quickly, perhaps even leapfrog developed nations, because their lack of traditional, wired networks would not inhibit them from deploying the new technology. Now there is talk of history repeating itself with the Industrial Internet--a key aspect of the emerging Internet of Things. For example, Guo Ping, Deputy Chairman of the Board of Chinese electronics giant Huawei, said in a recent report from the World Economic Forum, "The Industrial Internet will afford emerging markets a unique opportunity ...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential.
Avnet, Inc. has announced that it ranked No. 4 on the InformationWeek Elite 100 – a list of the top business technology innovators in the U.S. Avnet was recognized for the development of an innovative cloud-based training system that serves as the foundation for Avnet Academy – the company’s education and training organization focused on technical training around top IT vendor technologies. The development of this system allowed Avnet to quickly expand its IT-related training capabilities around the world, while creating a new service that Avnet and its IT solution providers can offer to their...
SYS-CON Events announced today that B2Cloud, a provider of enterprise resource planning software, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. B2cloud develops the software you need. They have the ideal tools to help you work with your clients. B2Cloud’s main solutions include AGIS – ERP, CLOHC, AGIS – Invoice, and IZUM
The Internet of Things Maturity Model (IoTMM) is a qualitative method to gauge the growth and increasing impact of IoT capabilities in an IT environment from both a business and technology perspective. In his session at @ThingsExpo, Tony Shan will first scan the IoT landscape and investigate the major challenges and barriers. The key areas of consideration are identified to get started with IoT journey. He will then pinpoint the need of a tool for effective IoT adoption and implementation, which leads to IoTMM in which five maturity levels are defined: Advanced, Dynamic, Optimized, Primitive,...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th 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 an...
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on Twitter at @MicroservicesE
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch of Docker's initial release in March of 2013, interest was revved up several notches. Then late last...
There is no doubt that Big Data is here and getting bigger every day. Building a Big Data infrastructure today is no easy task. There are an enormous number of choices for database engines and technologies. To make things even more challenging, requirements are getting more sophisticated, and the standard paradigm of supporting historical analytics queries is often just one facet of what is needed. As Big Data growth continues, organizations are demanding real-time access to data, allowing immediate and actionable interpretation of events as they happen. Another aspect concerns how to deliver ...
Enterprise IoT is an exciting and chaotic space with a lot of potential to transform how the enterprise resources are managed. In his session at @ThingsExpo, Hari Srinivasan, Sr Product Manager at Cisco, will describe the challenges in enabling mass adoption of IoT, and share perspectives and insights on architectures/standards/protocols that are necessary to build a healthy ecosystem and lay the foundation to for a wide variety of exciting IoT use cases in the years to come.
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
So I guess we’ve officially entered a new era of lean and mean. I say this with the announcement of Ubuntu Snappy Core, “designed for lightweight cloud container hosts running Docker and for smart devices,” according to Canonical. “Snappy Ubuntu Core is the smallest Ubuntu available, designed for security and efficiency in devices or on the cloud.” This first version of Snappy Ubuntu Core features secure app containment and Docker 1.6 (1.5 in main release), is available on public clouds, and for ARM and x86 devices on several IoT boards. It’s a Trend! This announcement comes just as...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
It's time to put the "Thing" back in IoT. Whether it’s drones, robots, self-driving cars, ... There are multiple incredible examples of the power of IoT nowadays that are shadowed by announcements of yet another twist on statistics, databases, .... Sorry, I meant, Big Data(TM), tiered storage(TM), complex systems(TM), smart nations(TM), .... In his session at WebRTC Summit, Dr Alex Gouaillard, CTO and Co-Founder of Temasys, will discuss the concrete, cool, examples of IoT already happening today, and how mixing all those different sources of visual and audio input can make your life happier ...
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover how hardware commoditization, the ubiquitous nature of connectivity, and the emergence of Big Data a...
SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy. Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Raspberry Pi, BeagleBone, Spark and Intel Edison. You will also get an overview of cloud technologies s...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
The WebRTC Summit 2015 New York, to be held June 9-11, 2015, at the Javits Center in New York, NY, announces that its Call for Papers is open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 16th International Cloud Expo, @ThingsExpo, Big Data Expo, and DevOps Summit.