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Desktop as a Service Pricing Models: Amazon’s New AWS Offer

Whether you call it hosted desktops, workspace as a service (WaaS) or desktop as a service (DaaS)… Amazon has a new pricing model for you to consider. It’s called Amazon Hourly WorkSpaces.

The new pricing model allows customers to pay by the hour for the hosted desktop service. At first glance that sounds a bit confusing: Why the heck would a customer abandon per-user monthly pricing (which is still available) in favor of this? But take a closer look and perhaps there are some clear use cases — including part-time employees, road warriors, job shares, or corporate training, education and remote administration, Amazon points out.

With the introduction of Amazon Hourly WorkSpaces, there are now two “running modes” for the on-demand desktop service, the company says. They are:

  • AlwaysOn – This is the existing mode. Users have instant access to a WorkSpace that is always running, billed by the month.
  • AutoStop – This is new. The user’s WorkSpace starts running and billing when he or she logs in, and stops automatically when you remain disconnected for a specified period of time.

Amazon WorkSpaces Pricing: MSP Models?

Amazon explains the WorkSpaces pricing model here (both monthly and hourly). But I haven’t had time to crunch the numbers and determine how many hours of consumption makes it ideal to jump from the hourly rate to the monthly rate.

We’ve also reached out to Amazon with the following questions. Can an MSP:

  • Build a multi-tenant hosted desktop system using WorkSpaces?
  • Manage multiple customers from a single dashboard in the system?
  • Set their own billing and pricing for the end-customers — essentially marking up the service over and above Amazon pricing?

If/when we hear back from Amazon we’ll update this article accordingly.

Desktop as a Service (DaaS) for MSPs

DaaS, as we’ve previously pointed out, has evolved into a richer Workspace as a Service (WaaS) model in recent years. And multiple companies are now pursuing WaaS strategies in the IT channel.

Among the channel-friendly names to know:

Joathan Lieberman

Jonathan Lieberman

Seth Bostock

Seth Bostock

WaaS providers are well aware of Amazon’s moves. “Amazon’s price and storage change further validates the flexibility needed by workspace users,” says Seth Bostock, CEO of IndependenceIT. “The market has seen a shift to user centric IT which requires highly adaptable solutions. Here at IndependenceIT, we have always developed tools that empower the Service Provider to deliver flexible solutions and have freedom of platform choice when looking to deliver workspace or App Services and eliminate vendor lock-in.”

Jon Senger, chief architect for Neverfail, had this to say: “Amazon just announced that they’re adding pay by the hour? Don’t they already do that? All they did was change the model from monthly to hourly billing. It’s hardly revolutionary; this the same way they handle every workload on their cloud. And the Expanded Root Volume is something you should expect from any vendor these days.”

Adds Jonathan Lieberman, CEO and co-founder of Itopia: “It’s important to understand that the AWS workspace product itself hasn’t changed. It just has a new pricing feature — Auto-Stop that changes the billing from per month to per hour. However, the caveat is that as soon as you turn on Auto-Stop, the client is charged $7.25, which accounts for 25% of the monthly charge for the workspace + .22/hour.”

Without getting too technical, unless you’re going to use the workspace on a very part-time basis, the price change is not going to have any impact on most users and businesses, Lieberman says. “The only use case we see for this is for temp or part-time employees, which is not really our target market.”

Lieberman also raised several key considerations that MSPs should keep in mind — and we’ll share them in a future article.

Constant Evolution

No doubt, pricing, features and functions can vary dramatically from solution to solution. Multiple research reports suggest WaaS is a fast-growing market. And there are certainly some signs of success. But we haven’t seen any one company emerge as a dominant force in this sector.

Even Microsoft has struggled to get it right, winding down its own Azure Remote App platform to embrace a Citrix alternative instead.

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7 Comments

Comments

    Craig Deveson:

    This is the model customers have been wanting for 2 years ! Well done AWS. Non AWS solutions may have more features but I suspect this crunches the margins for the industry so it will be interesting.

    Max Pruger:

    While the model might be good for direct users it’s difficult for MSPs to resell. Most end-users want “fixed fee” pricing with predictable costs. Billing an end user something different every month isn’t typically feasible and most MSP don’t want to risk losing money or jeopardizing their margins so they will calculate their cost assuming full monthly utilization.

    Max Pruger
    CloudJumper
    http://www.cloudjumper.com

      Max Pruger:

      Also, doing some back of the napkin math and using AWS’ Value bundle ($7.25 +.22/hr) and a 40 hour work week that equates to roughly $45/mth per user (already higher than CloudJumper’s unlimited and “fully managed” WaaS solution). This of course is a somewhat empty shell, which in order to make usable would require additional AV, backup, Active Directory, application installation and management, etc. Conservatively, this would increasing the price to north of $60 to $80/mth for only 40 hours per week of usage and would require the MSP to manage it all. For less than the price of the empty shell, an MSP could get CloudJumper’s entire turn-key solution and not have to worry about managing the environment. So while it’s interesting to see AWS update their pricing model, there are definitely still more cost effective, robust and MSP Channel friendly options.

      Max Pruger
      CloudJumper.com

    Chris Ploessel:

    We are a CSP that is focused on the Amazon Workspaces stack. This year we have converted about a dozen customers to this platform. Customers like it because of the ease of use, simple pricing, built in backups, ease of management. However as you point out, it is not channel friendly. We have to log into each customer’s portal separately to manage them. As a partner it is important to understand the barrier to entry on pricing as well. To take over the billing relationship you as the CSP are on the line for the customer’s fees. We’re betting our business that there is a market here, and it is just in the early stages of development.

    Joe Panettieri:

    Craig, Max, Chris: Thanks for adding some more perspectives on this market. We have some basic questions about WaaS — particularly: What’s still holding the market back? `

    We’ve seen the big market forecasts but I still don’t see a massive tipping point of MSP adoption…
    -jp

      Max Pruger:

      It’s coming, we’re just in the early adopter stage (similar to when I joined Kaseya back in the early 2000s). Also, it’s not an overnight transition. It typically takes 90 days from the time a new MSP partner signs up with us to the time they close their first deal. We are also fighting inertia, successful MSPs who are billing what I call “Pica” rates of $150+ to manage a physical desktop aren’t as motivated to make the transition as smaller providers who may be struggling or second tier telcos who missed the boat on physical desktop management. It’s these smaller MSPs and telcos who are the primary early adopters so it’s going to take them some time to penetrate the existing MSP customer base. My hope is that the larger MSPs will get on board before they see their market share erode. Of course, CloudJumper can help them do that with a turn-key solution at a price point that is more attractive than rolling-your-own (or AWS). There are other reasons but maybe we’ll save that for a follow on article 😉

      Thanks,
      Max Pruger
      http://www.CloudJumper.com

    Craig Deveson:

    Joe, I don’t think this market will as big as some have predicted but it won’t be small either. AWS could be onto something here to address the increasing part-time or casual worker who works 1-3 days a week. They are trying to disrupt the always on notion of desktops. With a few more tweaks to CloudMGR’s billing & automation engine this could be made easier for MSP’s
    -Craig

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