Pricing models for Hadoop products

A look at the various pricing models adopted by the vendors in the Hadoop ecosystem. While the pricing models are evolving in this rapid and dynamic market, listed below are some of the major variations utilized by companies in the sphere.

1) Per Node:

Among the most common model, the node based pricing mechanism utilizes customized rules for determining pricing per node. This may be as straight forward as pricing per name node and data node or could have complex variants of pricing based on number of core processors utilized by the nodes in the cluster or per user license in case of applications.

2) Per TB:

The data based pricing mechanism charges customer for license cost per TB of data. This model usually accounts non replicated data for computation of cost.

3) Subscription Support cost only:

In this model, the vendor prefers to give away software for free but charges the customer for subscription support on a specified number of nodes. The support timings and level of support further determine the subscription cost.

4) Package deal - Hardware, Software and services

Besides commodity hardware, the vendors have built specialized hardware and appliances which leverage Hadoop to the maximum. Pricing deals are worked out involving a combination of hardware, software and services for the deployment and maintenance.

5) Freemium:

The freemium model attracts the customer with free usage till a threshold limit. The limit, for example, may be in terms of data per day or number of user licenses or number of nodes. Beyond the threshold, the customer is charged on specified rates.

6) Connector costs:

As current systems have started integrating with HDFS, the vendors are also trying to make some money by selling specialized connectors. In some cases, the number of connectors is limited for free usage with paid subscription for broader number of connectors.

7) Cloud:

Within the cloud deployment, two models are more commonly popular:
- Pay-per-use: which imply cost based on usage charged periodically to credit or billing account.
- Half yearly or annual subscription: which imply special package for longer duration subscription commitment.
Further, the cloud models utilize charging models as a combination of one or more factors:
* Per node cost
* MapReduce cost
* Software usage per hour
* Storage cost
* Data Transfer cost
* Processing cost

During the year 2014, we expect higher pressure on licensing model while freemium models or pay per use models to take further flight. There will be downward pricing pressure on all vendors which could impact their margins and interest in the commoditized products. More interest will eventually grow towards specialized applications and services for customer which could lead to higher profit margins.