Cloud services are cheaper in the US than in Europe

Cloud computing users in the US are getting the best price in the world for cloud services, whilst European users are paying on average between 7 and 19 percent more for the same services.

This is according to analyst 451 Research, which this week released its Cloud Price Index report, analysing the differences in cloud service pricing around the world.

The reason for the difference in price between the US and Europe is down to European users having to fork out for a “protection premium” to ensure compliance with local data regulations.

European users are also having to dig deep to pay for improved performance by bringing applications closer to them, and also to pay for localised customer service.

In the US, which is just one country and one language, these costs are avoided whilst data regulations that affect inter-country data transfer are not applicable.

But local clouds are a must-have in Europe. That’s because they can adhere to data protection legislation, and the demand will continue given the ongoing confusion around Safe Harbor, the US Patriot Act, and the new US-EU Privacy Shield agreement.

It’s not all bad news for Europeans though, as 451 claims that clouds gets even pricier the further east you go. Comparable cloud hosting in Asia Pacific costs on average 14 percent to 38 percent more than in the US.

However, Latin America is the most expensive cloud region, with prices up to 38 percent higher than the US. This is because of the limited selection of hosting providers, says 451.

Dr Owen Rogers, research director of 451 Research’s Digital Economics Unit, who authored the report, said: “When evaluating cloud providers, enterprises should consider how they will take advantage of variances in prices in the short- and long-term to cut costs.

“We found one provider charged more than twice the average US price for hosting in Latin America, whilst another offered an 11 percent discount for hosting in Europe compared to the US. The global market for cloud is complex and cloud buyers need to understand typical pricing to properly evaluate their options and negotiate with suppliers.”