Friday, March 18, 2011

Reserved Capacity vs Usage based Capacity

As a cloud broker, Gravitant works with clients to match their needs with what different cloud providers have to offer.

In this process, we have noticed that most of our clients have high transaction volumes on their Dev and Test environments.  However, in the Production environment, transaction volume is low with a lot of variability.  This makes sense because transaction volume in the Production environment is customer driven.

And most of the cloud providers we work with have lower rates per hour for dedicated capacity and higher rates per hour for usage based capacity.

Therefore, the lowest cost solution for most of our clients is to go with dedicated capacity for their Dev & Test environments, and usage based capacity for their Prod environment.

However, this may not be the case for all clients.  Therefore, it is important to analyze historical transaction volume and utilization for each environment and application type separately in order to identify the optimal combination.  Eventually, the main objective is to derive the optimal target of reserved capacity for each environment/application.  More on this topic coming soon...

I would like to thank Robert Jenkins, CTO of CloudSigma, for his input to this discussion.

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