The difference between traditional enterprise software companies and cloud purveyors continues to erode. Today’s case in point — Amazon Web Services’ decision to offer third-party products on an annual subscription basis.
AWS Marketplace will now offer 90 products for an upfront yearly commitment – a plan it said will offer business customers predictable costs, such as discounts of 10 to 40 percent compared to typical pay-per-hour-per-instance price plan. But the use of that software is locked to that instance — it cannot be moved from regions or availability zones. A monthly subscription was also available.
By paying upfront, users get unlimited use of the software – albeit locked to that particular EC2 instance, as mentioned — for 12 months. Or they can stick to the existing hourly rate for “bursty” workloads, as AWS put it.
The usual argument for public cloud use has been that its great elasticity and scale let customers spin spiky workloads up and down without having to buy new hardware. But Amazon has also argued that its cloud is also broadly applicable to more stable enterprise workloads as well. That’s why it encourages big customers to lock into one- (or even better) three-year Reserved Instances as opposed to the more expensive on-demand instances.
Software from Alert Logic, Barracuda, Citrix, Fortinet MicroStrategy, Progress Software, Riverbed, ScaleArc, Tenable, and Vormetric is covered by this new annual subscription. A quick look at the full list of participants shows that enterprise software giants Oracle, Microsoft or SAP — all of which offer some products on AWS – are not included.
With Microsoft Azure getting good reviews as an enterprise-class public cloud, and Google also pushing its cloud platform, Amazon now has some web-scale competition on its hands. So look for more enterprise-friendly news to come out from now until its AWS Re:Invent event in November.
Enterprise buyers are used to paying upfront for use of software from Oracle, SAP, IBM etc. — and then ponying up for annual support and maintenance contracts as well. In fact that model is one reason many have fled to cloud in recent years
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