(This story originally posted here, now part of https://medium.com/being-wise)
Microsoft launched their Kubernetes product. This is big news well covered by many about Kubernetes winning the orchestration wars and becoming the “Linux of the Cloud”. As significant as that is, there was a part of the Microsoft announcement that heralds a much bigger shift in the business of cloud computing.
The public cloud vendors at scale are better than almost anyone else at efficient operation of infrastructure. But, they also trade on an important (if understated) reality. Although typical enterprises might run at 10% system utilization in their own datacenter, when they move to public cloud their utilization of VMs moves to ~20%. Yay, double! The big clouds probably run north of 70% utilization. By oversubscribing they trade on the difference between their utilization and yours. It’s highly effective utilization arbitrage but Microsoft just killed it.
The Microsoft product page: “Pay per use — container instances are billed on a per-second, per-vCPU, per-GB of memory.” This is the tipping point to a new level of competitiveness between the big cloud vendors.
AWS started it with Lambda, as they have started so much in cloud. Building parts of your applications with a functions-as-a-service model may have benefits (and some big risks — future post). In my conversations with engineering teams, one of the most frequently stated (and marketed by AWS) benefits is the pay-for-only-what-you-actually-used model. Microsoft just made this billing model no longer Lambda-only territory. Here is the model now for public cloud: Container packaged, dynamically managed… and paid for by the container second.
Say, does this billing model make containers “serverless”?
Expect the other cloud services to follow suit soon, especially given the depth of commitment Google has to a container-based infrastructure. Might Google have an efficiency advantage?
Container-per-second efficiencies are now driving systemic efficiency and price, not arbitrage. Internal enterprise billing for services will follow that lead. SAAS services may change how they bill. What anyone pays on public cloud to run containers is going to drop even faster, hastening the refactoring of VM-based deployments to container-based. This is something Kubernetes is especially well suited to, and creates the virtuous cycle. Well done, Microsoft!
If you haven’t started that migration to containers yet, you now have one more reason to get busy. This announcement marks a new era in public cloud price competitiveness.
Originally published at medium.com on August 7, 2017.