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Watch Out for Gotchas in Cloud Data Warehouse Pricing

Watch Out for Gotchas in Cloud Data Warehouse Pricing
You know the scenario. A company moves to the cloud, users throughout the organization quickly spin-up cloud environments for their departmental needs, and everyone’s happy with the benefits and value like performance and elasticity. Then the company gets the bill. And it’s a whopper. Not only did the business not see the savings it expected, but the cloud actually cost more than was budgeted. A lot more.
 
Industry analysts expect this problem to continue, which leads to another problem—companies wondering if moving to the cloud was a smart decision. “By 2022, 75% of organizations using cloud data management will encounter budget overruns resulting in their questioning the value of using cloud services,” according to Gartner[1].
 
How can executives sleep at night knowing they’re probably going to get hit with unexpected costs? Executives face enough challenges without agonizing about trying to justify unplanned expenses.
 
Unfortunately, being blindsided by higher-than-expected costs is too common. It can be the difference between expecting to spend $200,000 for cloud data warehousing, yet finding out after implementation that it costs $500,000. While some cloud data platform providers take a cavalier attitude that their customers (in particular the customers’ CFOs) just need to get used to paying more, Teradata provides a solution.
 
Teradata’s flexible pricing offers companies both blended pricing and consumption-based pricing that enables them to manage their costs—and pay for only what they use.
 

Avoiding Overruns Shouldn’t Be Tricky

As Gartner noted in a recent paper “Overcome Economic Uncertainly Through Financial Governance of Your Cloud Data Management Environment,” data and analytics leaders are often caught off guard by cost overruns. It says that the ability to easily create cloud resources or scale an environment without paying attention to cost implications both contribute to these painful overruns.
 
Other culprits include hidden costs in the cloud that didn’t apply to on-premises environments, and big differences in management frameworks for budgeting and cost controls across cloud data warehouse providers. Workflows that move data out of the cloud can also incur extra charges that may not have been considered in the initial budgeting and planning. Other factors, such as workloads that are not aligned with the optimal pricing model, can also increase costs.
 

Don’t Let Financial Controls Affect Your Cloud Agility

Organizations can follow the advice in Gartner’s research note to apply proactive measures to control cloud deployments, but this takes away the agility, flexibility, and elasticity that companies like. To avoid this, companies look to Teradata. They gain all the benefits of a modern cloud data analytics platform while paying only for what’s used—and nothing more—while being able to choose payment options.
 
Inquiries to Gartner on cloud and “cost,” “cost optimization,” “pricing,” and related keywords were up nearly 17 percent from 2018 to 2019, indicating this is an area where companies are struggling. Companies also face challenges when business users leverage dynamic scaling in the cloud.
 
As Gartner noted regarding one cloud data platform provider, when workloads are sustained and do not have variability, the provider’s dynamic elasticity capabilities have less value because a sustained workload will constantly draw down the “credits.” The credits can be used to pay for cloud services as part of the company’s complex pricing structure.  
 
One big drawback to this approach is that placing constraints on a system limits the value the system can provide. Sure, capping the number of users, reducing workloads, scaling back performance, or taking other measures will manage costs, but they also take away the reasons why many companies moved to the cloud in the first place. No wonder so many executives end up questioning the value of some cloud providers.
 
But rest assured, companies can have the best of both worlds. They can benefit from data warehousing and advanced analytics in the cloud without those pesky limitations and still not get hit with unexpected costs. It’s possible—in fact companies should demand—to have flexible and transparent pricing while taking full advantage of advanced capabilities in the cloud. That’s why Teradata offers a straightforward pricing model that’s complexity-free. Paying only for what’s used is simple to understand and friendly on the budget.
 

Bustin’ the Pricing Myth

One misperception in the marketplace is that Teradata’s data analytics solutions are expensive. Anyone who looks at the numbers knows the opposite is true. Teradata offers premier capabilities on a modern cloud analytics platform, Teradata Vantage™, with straightforward consumption pricing and industry-best rates. For example, it offers prices as low as $5 per hour for computing and 19 cents per terabyte per hour for storage. This means at the low end, Teradata is competitive. At the high end, Teradata is a no-brainer.  
 
That’s because Teradata provides the lowest cost per query for enterprise-scale analytics. The truth is Teradata has the best deal going with cost per query as low as $0.007 at scale. That’s a truth company CFOs like to hear.
 
Using its low-cost platform is one answer for mitigating cost overruns. Pay-as-you-go consumption pricing for Vantage gives companies the best analytics with easy options for getting started. Organizations benefit from a modern cloud analytics platform that’s cost effective and easy to deploy. See more about Teradata’s flexible cloud pricing here.
 
Another truth is that companies need more than a modern approach to analytics. They also need a modern approach to pricing. Vantage offers both. Flexible pricing includes blended and consumption options, giving customers the pricing peace of mind they’ve been missing from other providers. Teradata aligns investment with outcomes, delivers transparency by letting companies easily track costs by department, and offers automatic scaling to eliminate the problem of forecasting user demand. In other words, multiple problems solved.
 
Simple pricing metrics let customers predict pricing to prevent gotcha situations with billing and awkward conversations with CFOs. For example, commitment and on-demand options let companies jump into the cloud for data analytics using the payment method that’s best for their business. Commitment allows pre-purchase of compute and storage for the best budget predictability, while on-demand provides the freedom to use as much or as little as they want and pay monthly. Customers can choose the option that works best for their workloads.
 
Flexible, blending pricing simplifies monitoring and managing costs. In addition, flexible consumption pricing lets companies choose between pay-as-you-go and flat rate subscriptions in order to accurately predict costs.  
 
Successful companies know that data is their greatest asset. They need to squeeze maximum value from all of their data and do it at the lowest possible cost. That’s Teradata’s strong suit. Teradata’s hyperscale platform gives companies the answers needed to build their business for the future without sticker shock or buyer’s remorse. Check out Teradata’s modern approach to cloud analytics, its modern approach to pricing, and sleep easy at night knowing companies are getting the best analytics at the best price.
 
[1] Gartner, Overcome Economic Uncertainty Through Financial Governance of Your Cloud Data Management Environment, Adam Ronthal, April 29, 2020.

Portrait of Chris Twogood

(Author):
Chris Twogood

Chris Twogood is Senior Vice President Global Marketing for Teradata Corporation. He is responsible for the Teradata brand, influencer relations, content marketing, corporate communications, global events, demand generation, account based marketing and digital for Teradata including web and social. Chris has thirty years of experience.  Chris has extensive experience in the computer industry specializing in data warehousing, decision support, customer management and analytics
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