Pricing Clouds Enterprise Adoption of SAAS Databases

The concept of Web-based databases is catching on, but the cost may be too high for large enterprises.

With the software-as-a-service model gaining steam in the database world, the question of whether enterprises will migrate their data to the Web may come down to one key factor: cost.

Some providers, such as with its SimpleDB, have taken a per-hour or per-gigabyte pricing model, while others are trying a per-user strategy. Others let users pay per month for a fixed amount of storage. But given the size of enterprise databases and the potential number of users, migrating to an in-the-cloud database could prove too costly. Time will tell which pricing strategy will be the most successful, analysts said.

"Pricing is clearly an issue, and vendors will have to experiment with different pricing models to ensure that both large and small businesses can make the most of the opportunity," said Matthew Aslett, an analyst with The 451 Group. "I expect this is an issue that will take some time to be addressed fully."

Many vendors are targeting the small to midsize business market for which the complexity of a database and data warehousing requirements strain both IT budgets and staffs. Philip Howard, an analyst at Bloor Research, said he was skeptical that an SAAS model would work for enterprise customers when it comes to the database.

"I don't think a new business model will make any difference-I can't see this working for large organizations, except maybe at a departmental level," Howard said. "Given that you get a perfectly good open-source database for nothing, then either/or A, you don't want to host the hardware and B, you don't want to manage the database.

"The only people that have much of an issue with either of these are large organizations, not small ones-small ones use inexpensive hardware and, if they have sense, buy databases that are simple to manage and don't require much tuning. But large organizations have the resources to provide these things."

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Officials at EnterpriseDB, however, are betting that users of larger databases will be interested in making the transition. EnterpriseDB, which makes an Oracle-compatible database based on PostgreSQL, announced plans the week of Jan. 28 to bring its Advanced Server product into the cloud. EnterpriseDB is targeting Web 2.0 enterprises, SAAS companies and ISVs.

"We haven't announced pricing yet," said Bob Zurek, chief technology officer at EnterpriseDB.

"We're not ready quite yet to talk about pricing. We will, though, when we get close to launch. The typical model that Amazon S3 and EC2 [follow] is a per-hour for CPU time and also per-gig type storage model," Zurek said.

Aslett recommended that businesses look before they leap to ensure that their chosen path best supports their data and applications needs.

"There is a big difference between online database applications for consumers and SOHO [small office/home office] users, and enterprise database systems deployed on [an] on-demand infrastructure," Aslett said. For smaller businesses "with minimal database requirements, the on-demand model might well be more cost-effective, but for large amounts of data, usage-based pricing might well prove prohibitive," he said.