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Are Price Cuts for Cloud Services a Thing of the Past?

Are Price Cuts for Cloud Services a Thing of the Past?

cloud servicesOne of the biggest factors that drove the interest in cloud services was pricing. Often, businesses were wooed by the potential savings compared to maintaining their own data centers. On top of that, the big three cloud vendors were undercutting each other almost daily.

 

But now that cloud services are established as mainstream options, and the acquisition of new business is stabilizing for providers, are price cuts a thing of the past? The answer is yes, and no.

 

The Peak of Cloud Service Discounts

 

Cloud service discounts feel commonplace. However, this activity, by some estimates, actually peaked back in early 2014. Since then, aggressive price cuts have slowed in this section of the market. Initially, companies have to entice customers to accept a new working paradigm, and shifting from internal resources to external services is a big move.

 

Even large tech companies like Amazon, Google, and Microsoft had to convince the business world that cloud technology was an ideal solution. In 2013, security was often cited as a primary concern regarding these services, and some of that sentiment still persists today. But now that the technology has a few solid years under its belt, those concerns are fading fast. And that means companies don’t have to use aggressive pricing to attract new business today, as more organizations feel confident in the service’s abilities.

 

Competition Reigns

 

However, pricing is still going to remain a point of competition among cloud service providers. Top providers are still fighting with each other to score the best contracts, and that keeps pricing competitive. And most providers have solidified the infrastructure required to support demand, so some of their costs have stabilized as well.

 

Most early adopters of the cloud platforms were smaller scale companies and startups. Startups were a natural market to pursue since their resources weren’t as entrenched in on-premises solutions, and smaller organizations can transition more easily.

 

Large enterprises are just beginning to show real faith in what the technology can do for their businesses. And every cloud service company wants to land a big fish.

 

Negotiating Opportunities

 

Competition in the cloud service arena gives companies the ability to negotiate service contracts. Aside from the major players, many other providers have emerged that can serve businesses well. Taking the time to consider a wide range of options can be beneficial, as providers are still hungry for new business.

 

Negotiating transitions of this scale can be time-consuming. Aside from securing proper pricing, companies need to have the know-how and experience necessary to ensure a smooth transition. While large enterprises may have the resources required to take on such a monumental task, mid-sized and smaller organizations might find that too challenging to manage alone.

 

In those cases, working with a consulting firm that connects with a vast selection of service providers can be an ideal course. First, they can help you truly assess your needs regarding cloud services to determine which providers offer the perfect combination to meet your needs. Then, they have the ability to negotiate on your behalf, and can even pit vendors against one another to secure the most favorable contract.

 

Even though the age of deep discounts for cloud services may be ending, there is still room to secure highly favorable deals that will significantly lower the costs associated with maintaining your IT operations. So, consider acting now. You may find a provider that provides the ideal mix of capability and affordability while allowing your company to be positioned for future growth and development.

Derek Roush

Derek Roush is the President and Founder of VocalPoint Consulting. He has over 15 years of experience in the industry supporting telecom and cloud service resellers. Since 2010, he has led VocalPoint Consulting to become one of the leading telecom and cloud service consulting firms in the industry.

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