Platform as a Service to Take Over Cloud Price Wars

By CIOReview | Wednesday, April 30, 2014
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FREMONT, CA: Cloud customers had a field day when all major players slashed the price for Infrastructure as a service (IaaS). Word out on the cloud market is that though it may not be possible with services like Software as a Service, it could be for Platform as a Service (PaaS).

PaaS lets startups to get on with application development without bothering about the infrastructure. But with the price wars going on, brings PaaS also under the radar of influence. Expert opinion is quite divided on probable consequence of IaaS price reduction and effect on PaaS.

In the guest post on Venture Beat site, Muhammad Saad Khan of Cloudways shares some interesting observations made in the online discussion conducted on the question-and-answer website Quora titled ‘How will the PaaS hosting providers react to the recent price drops by Amazon and Google?’

Tech writer and editor Alex Williams says, “There have been price drops before with no related impacts on the PaaS market. The market has actually grown quite a bit over the past few years amidst these price drops.” Appirio co-founder Narinder Singh confirms with Williams and says “Given how small a percentage of the cost IaaS is of PaaS providers, I expect we will not see any substantial drop on public pricing.” In the discussion, they have ruled against any possible effect on the pricing of PaaS.

On the other hand, entrepreneur and Cloudways co-founder Aaqib Gadit is more optimistic about the connection. He says, “For a reliable PaaS provider, IaaS is a considerable component of their pricing. This price war will surely lower down this part, the benefits of which should be forwarded to their customers.”

Competition in the industry is also a defining factor and as the chief technology officer of Cloudways states, “Surely, value-added services and differentiation are important, but competitive and clearly structured pricing models will be very important too. In short, a PaaS pricing war will follow an IaaS pricing war.”