Steep Google Anthos pricing geared toward large enterprises

Details about Google Anthos pricing and system requirements give more clarity to potential customers -- for better or worse.

Anthos, unveiled at the Google Cloud Next '19 conference last week, comprises Google Kubernetes Engine, GKE On-Prem and other Google software into a platform for Kubernetes container management across on-premises and cloud environments. It positions Google as a more neutral player among cloud providers, with an emphasis on workload portability, rather than driving customers to only its infrastructure.

But Google Anthos isn't cheap -- it's a play for business from large enterprises, which will need to take several steps to calculate its actual price tag.

The list price for Anthos is $10,000 per month, per 100 virtual CPUs (vCPU), with a minimum one-year commitment. That monthly fee only pays for the Anthos managed software layer, not the underlying infrastructure on Google's cloud. It's also sold by 100-vCPU blocks -- that means, for example, a company that needs only 125 vCPUs to run its jobs will pay for 75 idle vCPUs.

Prices for Google's cloud infrastructure vary widely across instance types, and cost can vary based on geographic region. For example, as of April 18, the monthly cost for a low-end, n1-standard-1 instance, which includes 1 vCPU and 3.7 GB of memory, costs $24.2725 per month in Google's Iowa region, but $33.98 in its Hong Kong region. Thus, a customer who rents n1-standard-1 infrastructure for Anthos in the Iowa region will pay nearly $125 per month, per vCPU.

If you're a small business or small software developer, you're better off going after traditional Google cloud services.

On the systems side, on-premises Anthos requires VMware vCenter 6.5 in order to create VMs that support the GKE On-Prem cluster. VMware is fairly ubiquitous in enterprise data centers and customers can use their existing hardware for Anthos; Google noted the latter point as an advantage for Anthos. Still, customers who deploy Anthos on premises must either free up space among their VMware licenses or purchase more.

Customers must also have F5 Networks BIG-IP load-balancers to handle Layer 4 networking requirements for on-premises Anthos workloads, Google said.

Finally, support is not included in Anthos' monthly cost, even though it is required by Google. The company recommends that customers purchase an enterprise-level support contract, which is the greater of $15,000 per month or as a percentage of a customer's total spending. So, a customer who spends $1.1 million per month on Google's cloud would pay $64,000 per month for an enterprise support contract, according to an example provided by Google.

Anthos' costs in context: Prepare to pay a premium

Google doesn't plan to add any granularity to Anthos' 100-vCPU block pricing model -- at least for now.

"We have created this pricing structure based on what we have heard from our customers in terms of their own buying patterns," a Google spokeswoman said in a statement. "As customer needs evolve, we will introduce additional pricing options over time, but right now, this is the only available option."

Owen Rogers

Google Anthos subscriptions get more expensive, proportionally, if customers don't size their workloads correctly, said Owen Rogers, research director of the digital economics group at 451 Research. If a customer buys a block of 100 vCPUs and only uses half of them, each vCPU managed via Anthos is charged at an additional $200.

"We do hear enterprises are willing to pay a premium for portability and hybridity, something Google is promising with Anthos," Rogers said.

Anthos makes sense only for certain customers, said Frank Scavo, president of Computer Economics, an IT consulting firm in Irvine, Calif.

"If you're a small business or small software developer, you're better off going after traditional Google cloud services," he said.

As for Anthos' real targets, larger enterprises have some cards to play. As with almost any enterprise software product, Anthos' $10,000-per-month list price is likely subject to negotiation, particularly by the prominent brand-name organizations that Google is eager to court.

This dynamic ties into the arrival of former SAP executive Robert Enslin as Google's new head of cloud sales. Enslin spent 27 years at SAP and has overseen many large, complex deals for its ERP software.

ERP workloads are the crown jewels of many customers' business, and cloud vendors, including Google, have pushed hard to attract these workloads to their platforms. Enslin's job will be to entice SAP customers to Google's cloud. Google intends Anthos to be a key driver of this, and buyers may have the advantage at the negotiating table, especially to start.

Moreover, it is still early days for ERP migrations to the cloud. More than 60% of ERP implementations remain on premises, with 19% hosted and the rest on cloud platforms, according to recent survey data from Computer Economics. "There's still a lot of runway," Scavo said.