More Related Content Similar to Pricing and Revenue Projection in a Cloud-Centric World (20) More from Michele Leroux Bustamante (12) Pricing and Revenue Projection in a Cloud-Centric World1. DEVintersection
Session AZ05
Pricing and Revenue Projection in a
Cloud-Centric World
Michele Leroux Bustamante
michelebusta@solliance.net
2. Michele Leroux Bustamante
Managing Partner
Solliance (solliance.net)
CEO and Cofounder
Snapboard (snapboard.com)
Microsoft Regional Director
Microsoft MVP
Author, Speaker
Pluralsight courses on the way!
Blog: michelebusta.com
michelebusta@solliance.net
@michelebusta
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3. Agenda
The impact of pricing
Azure pricing tools
Estimating costs across features
Mapping costs to customers
Pricing strategy
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4. The Impact of Pricing
Cloud pricing has impact on your business
Cloud architecture and feature selection
Estimation of immediate costs
Estimation of costs as the business grows
Cost to the business per user
Revenue required to offset costs (and yield a profit)
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5. Sign Up Options
Free Trial, 90 days
Pay-as-you-go model
Monthly subscriptions (discounts pay-as-you-go)
Other Member Savings
MSDN Subscription
BizSpark (Regular, Plus, One)
Microsoft Partner Network (MPN)
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6. Azure Pricing Tools
Tools are useful for rough estimates only
• http://www.microsoft.com/windowsazure/pricing/purchase-options/
Pricing Calculator
TCO Calculator
Every business must review how they use features, and estimate the
numbers based on expected usage patterns
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7. Core Features / Costs
VM size and compute
Azure Storage and SQL Azure
CDN
Service Bus
Caching size requirements
Identity and Access Control (FREE)
Bandwidth usage across all features
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8. Compute Instance
Web Sites or Cloud Services?
What size VM and how many?
Factors:
CPU
Memory
Disk space
Measured in clock hours
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9. Web Site
ASSUMPTION:
Using reserved instances for production
Calculations are based on clock hours
CPU cores and memory drive instance size required
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10. Cloud Services
ASSUMPTION:
Using at least a Small instance for production
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11. Cloud Services
Disk space increases since
June 2012
No price changes
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13. Storage
How much storage is used across tables, blobs, queues?
How many rows per user by table grouping?
How much media?
What generates queue messages?
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14. Storage
How many transactions?
Differs by table, blob, queue
All CRUD operations
Queue reads even if they don’t return an item
Use back off polling to reduce costs
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15. Storage
Storage transactions price reduced since June 2012, now per 100K tx
Storage prices reduced twice since June 2012, plus benefits for increased
capacity
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16. CDN
Transactions same as blob storage costs
Data transfers included in blob reads
Future changes between CDN and storage charges could warrant
separation for estimates
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18. SQL Azure
Relational data requirements
10GB storage is plenty for many small businesses
Big data options available
Evaluate your storage records
How big are record footprints?
How many records per account, per user
How do records grow? Based on average usage of the system?
How are records accessed?
Web pages
API
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19. SQL Azure
Rate reductions since June 2012
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21. Caching
Monthly fee by size
Typical Web caching
Browser sessions, shopping carts
Application data
Varies with application requirements
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22. Caching
No rate changes since June 2013
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24. Service Bus
Service connections
At service host startup
Receive message buffer
Client connections
Each “proxy” to call endpoints
Send message to buffer
Concurrent connections, not in total!!!!
Averaged each 5 min period
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26. Identity
Access Control is FREE
Directory features are in preview
Basic features will be FREE
Some advanced features may have a charge upon release
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27. Bandwidth
Many aspects of the system
Blob downloads, web page data, reports, each with different usage
patterns
Blob reads may be CDN
Cache traffic with on-premise servers
Service bus traffic
Identity traffic
Estimate by user region
Same region transfers are no charge
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28. Bandwidth
Reduced costs since June 2012
New benefits for increased usage
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30. Costs / User
Allocating costs per user can vary
Biggest costs are bandwidth and storage for large media
Users pay for media
Look at storage as fixed cost per media
Downloads and transfers are unpredictable
How often does producer access media?
How often does consumer download purchases?
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31. Cost Totals
Provide estimates by quarter
Estimate growth trends and compare to actual values
Quantify growth factors
What is per customer cost, do they pay more?
What is cost of doing business?
Can margins cover the latter?
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33. Pricing Spreadsheet
Up to date for March 2013 pricing
Based on the following assumptions:
Cloud Services (same price as Web Sites)
Does not include free or preview items:
Virtual Network
Connect and Traffic Manager
Active Directory
Mobile Services
Does not include these features:
SQL Reporting
HDInsight
Media Services
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34. Monitoring Costs
Cost factor What to monitor
Compute VM size CPU usage, memory, disk space, bandwidth
Storage Average storage per user, other multipliers
Storage transactions Average CRUD per user records, blobs; queue messages
generated per user (or ?)
Cache Average size cache per user session, average concurrent
users
Service Bus Average service restarts, average connections made per
user, average concurrent users
Bandwidth Average users per region, page/service requests and
data, media requests, caching requests; averages per
user per day/month
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36. References
Conference resources:
http://michelebusta.com
See my snapboards:
Currently at the alpha site:
http://snapboardalpha.cloudapp.net/michelebusta
Will move these to snapboard.com/michelebusta when we go live on the
main site (SOON watch my blog for announcement)
Contact me:
michelebusta@solliance.net
@michelebusta
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37. Summary
Estimating pricing requires a hands-on approach
Every app is different
Usage patterns will vary
Bandwidth is by far the big cost driver
Estimate that, and you have a good idea of your margins
Pricing is difficult at first
You want to make sure you cover your costs
Easier to drop prices than to increase them, beware!
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38. Questions?
Don’t forget to enter your evaluation
of this session using EventBoard!
Thank you!
Editor's Notes IF(X<1, X*$, IF(X<50, 1*$ + (50-X)*$, IF(X<500, 1*$ + 49*$ + (500-X)*$, IF(X<1000, 1*$ + 49*$ + 450*$ + (1000-X)*$, IF(X<5000, 1*$ + 49*$ + 450*$ + 500*$ + (5000-X)*$, IF(X<9000, 1*$ + 49*$ + 450*$ + 4000*$ + (9000-X)*$, NA)))))) How many records per user in the system?Other records unrelated to users?Footprint per record per table? Average size of record?