The Risk of Cloud Lock ins :: What would be the Impact of Google App Engine Price Hike?

In some of my recent posts, I had mentioned that the risk of Lockins on a Cloud can have a significant impact for businesses running their services on the Cloud. I had mentioned about Cloud services like CloudSigma which offers data portability without lockins

Informationweek has a news article about how Google App Engine’s recent price hike has been impacting the developers. (Google App Engine Price Hike Stuns Developers) People are reporting a 50 % to 1000 plus % price increase depending on the Cloud applications they have deployed on Google Apps.

The information provided in the news article and the discussions of dozens of users indicate that many of them have to shell out a lot going forward to keep their services running and they are not happy about it. It seems this could be a show stopper for some of the businesses.

One of the users responding to this on the discussion thread , mentions “It’s about 300% increase for me as well. May app is huge and this would end up putting us out of business. We need some other options or else you will lose a customer paying thousands per month”

So, the risks of the price increase such as this has the potential to  impact the following

  • Sustaining the operations on the cloud (against your budgets) or Going out of Business
  • Losing customers as one may have to transfer the cost by charging more or due to the above
  • Significant reduction of ROI as the TCO raises. Reduced margins
  • Significant time and cost to redevelop and port the application on to another cloud service. This can lead to one or more of the above mentioned impact.

Now ,given one or more of the above sort of impact that the businesses may experience, How easy is it going to be them to move from Google App Engine to Other Cloud alternatives?? The answer in general is that it is not going to be easier as Google App Engine  provides proprietary  datastorememcacheURL fetchmailimages and Google Accounts APIs.

Added to this, many developers have optimized the design and code specific to Google App Engine to achieve lower pay per use costs for the run  services .So,it’s not going to be easy to replicate this in another cloud environment in a short time.

Given this, My belief is that  the Proprietary nature of the implementation at various levels could lock in many of the businesses who run their services today on Google App Engine and this means its going to take a lot of time for them to port their applications to another cloud and migrate their data.  I  could only imagine many of them may be frantically working towards mitigating their business risks with the onset of this situation.

As pointed out by Sandhill Research, The Fear of Lock-ins on the Cloud will be much more serious and prevalent in the coming days if incidents such as this has the potential risk to affect the bottom line of a business running their services on the cloud and especially those who generate revenue from it.

The take away is that every business that wants to leverage cloud computing should do a careful risk management during the the ‘upstream’ phase of their transformation to the cloud and as a part of the Risk management plan, it is important to identify the risks brought forth by vendor lock ins and address suitable risk mitigation plans. The evaluation of the Cloud vendors and technologies will also form a critical part of this exercise.

 

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