Managed Kubernetes Pricing Battle Begins

In a move that could spark an all-out battle for market share by cutting the cost of deploying Kubernetes via a managed service, Red Hat has cut the cost of deploying a node on its OpenShift Dedicated cluster by 25 percent when running on the Amazon Web Services (AWS) cloud and reduced the cost of deploying additional nodes on the same cluster by 50 percent.

Red Hat’s move comes at a time when the number of Kubernetes clusters employed in a production environment is accelerating. The challenge many IT organizations are wrestling with now is determining whether they want to manage those clusters on their own versus relying on a managed service provider (MSP). By reducing the initial cost of switching to a managed dedicated instance of a Kubernetes cluster to less than $30,000 a year, Red Hat is making a case for cost efficiency—a dedicated IT administrator can cost a company more than $100,000 annually.

The company is also signaling it will make similar adjustments to pricing for instances of OpenShift Dedicated running on Microsoft Azure and Google Cloud Platform (GCP) sometime this year.

Reza Shafii, vice president of platform services for OpenShift at Red Hat, IT organizations also will have the option of using instances of AWS that they negotiated a price for versus being required to use instances of AWS under a subscription license provided through Red Hat.

At the same time, Red Hat is expanding the range of services provided via OpenShift Dedicated, including an ability to deploy a cluster spanning multiple availability zones, expanded support for multiple EC2 instance types, support for encrypted persistent volumes and enhancement to the cluster console Red Hat makes available to customers.

Red Hat’s moves may or may not kick off a full-blown price war for managed Kubernetes services. But there are already more than 75 distributions of Kubernetes that have been certified by the Cloud Native Computing Foundation (CNCF), most of which are being made available in the form of a managed service. Given the extent of choices in the market, it’s now only a matter of time before other providers begin to add more services for the same price or drop the price of existing services in the hopes of making up the difference in increase consumption. In fact, providers of managed Kubernetes services that are unable to drive consumption of cloud services at scale soon may find themselves unable to compete from a pricing perspective. Clearly, larger vendors with deeper financial resources have an incentive to reduce the total number of potential competitors offering managed Kubernetes services sooner than later.

IT organizations in the meantime should consider their options. The less time they spend managing Kubernetes, the more time and money there is to focus on applications. The issue they will need to determine is the price point at which a managed Kubernetes cluster becomes too attractive to ignore.

Mike Vizard

Mike Vizard

Mike Vizard is a seasoned IT journalist with over 25 years of experience. He also contributed to IT Business Edge, Channel Insider, Baseline and a variety of other IT titles. Previously, Vizard was the editorial director for Ziff-Davis Enterprise as well as Editor-in-Chief for CRN and InfoWorld.

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