Could Bungee Labs Undercut EC2 Pricing?

Bungee Labs is changing the landscape of utility computing and SaaS billing options by offering pricing based on compute time, bandwidth and the number of times an application communicates back with its host server only when the program is actually in use. And the cost to startups could be less than that of using Amazon Web services.

Using Amazon’s EC2 computing service results in charges to the end user whenever the application up and running, whether they’re using it or not, because the program is still drawing on the EC2 compute power. Unless a startup wants to force customers to quit the program whenever they’re not using it, some measure of compute power is still necessary.

The Bungee Labs offering is a development platform where programmers go to build, test and deploy applications. It’s in the same camp as offerings such as Rollbase, Coghead or QuickBase, except that from a developer’s point of view, everything is done in the cloud. Such a holistic approach means a developer doesn’t need to get storage or compute power from Amazon — or any other vendor — before building and deploying the product.

Bungee doesn’t charge developers until the product is deployed, either, but the company’s director of marketing, Brad Hintze, told me the infrastructure is already in place and said that letting developers build and test for free isn’t a huge cost. “The math is working out so far,” he said. He also noted that until the end of the Bungee beta period — slated for late 2008 or early 2009 — even deployments are free.

Bungee will charge developers only when the program is talking to the Bungee servers and drawing compute power. It can afford to do this because Bungee owns the infrastructure and is running one program — the BungeeConnect platform — on that infrastructure. While building an entire software business in the cloud isn’t feasible for everyone, it might be a cheap way to test the waters for a fledgling software startup or even as an internal IT person at an enterprise.

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