Kubernetes on a Private Cloud: Cost and Performance vs. EKS and GKE

The default choice for running Kubernetes workloads today is often Amazon EKS or Google GKE. While these managed services promise convenience, they come at a significant cost both in dollars and control. The reality is that as your Kubernetes footprint grows, you’ll encounter inflated pricing, performance limitations, and vendor lock-in that can hamper your organization’s growth and flexibility.

This post examines the true cost of managed Kubernetes services and presents an alternative: Kubernetes on a private cloud. We’ll break down the financial and performance differences between EKS/GKE and private cloud solutions, showing you how to achieve better results while maintaining complete control over your infrastructure.

The Hidden Costs of Managed Kubernetes Services

Beyond the Sticker Price

When evaluating managed Kubernetes services like EKS and GKE, the published pricing only tells part of the story. You’re paying for several layers of costs that compound as your workloads grow:

Control Plane Fees: Both EKS and GKE charge $0.10 per hour ($73 per month) just for the control plane. This fee exists regardless of whether you’re running a single pod or hundreds. With private cloud deployments, you run your own highly-available Kubernetes control plane at no extra cost.

Inflated Worker Node Pricing: Public cloud providers markup their compute instances significantly. The same virtual machine specs cost $39.36 per month on AWS versus $7.80 on a private cloud – a $28.56 difference per instance.

Storage Throttling: Performance measures how fast and effectively applications respond to user interactions. If the infrastructure lacks the necessary power to accommodate the demands of Kubernetes workloads, applications will become sluggish and unresponsive. Managed Kubernetes services strictly throttle storage performance, and exceeding your provisioned IOPS results in degraded application performance.

Data Egress Charges: Public cloud providers charge premium rates for data leaving their networks. These costs can quickly escalate for applications with high data transfer requirements.

Real-World Cost Comparison

Let’s look at the financial impact at different scales:

These savings represent real money that your organization can redirect toward hiring talent, training teams, or investing in additional infrastructure capabilities.

Performance Limitations of Multi-Tenant Infrastructure

The “Noisy Neighbor” Problem

Where your servers live and where your data lives are incredibly crucial. A recent research study from a Kubernetes vendor showed that 93% of organizations are having security vulnerabilities in their Kubernetes clusters. Beyond security concerns, managed Kubernetes services introduce performance issues through their shared infrastructure model.

Your worker nodes run on shared, multi-tenant hardware alongside other customers’ workloads. This creates several performance challenges:

• Inconsistent CPU Performance: Other customers’ applications can consume CPU cycles, leading to unpredictable performance for your workloads
• I/O Latency Variability: Shared storage systems create latency spikes when multiple tenants access storage simultaneously
• Network Congestion: All pod-to-pod and pod-to-storage communication runs over the public cloud’s shared network infrastructure

Storage Performance Constraints

Public cloud storage systems impose artificial limitations to ensure fair resource sharing among customers. Without adequate scalability, infrastructure might struggle to keep up with the needs of a growing business. This lack unfortunately may result in system outages, extended downtime, and a loss of customers who expect consistent and reliable service.

You have no ability to tune the underlying storage for your specific workload characteristics. Whether your application is read-heavy or write-heavy, you’re constrained by the provider’s one-size-fits-all approach.

Private Cloud Advantages: Performance and Control

Single-Tenant Hardware Benefits

Private cloud infrastructure using dedicated hardware eliminates the performance unpredictability of shared environments. With single-tenant hardware, you don’t have to worry about noisy neighbors affecting your applications, providing consistent and predictable performance.

Storage Performance: Private cloud storage platforms built on Ceph provide higher IOPS and throughput than premium managed storage tiers at a fraction of the cost and without throttling. At OpenMetal, our configurations use high-performance hardware, like Micron NVMe drives for OSDs and low-latency, high-speed networking, which we have validated for Ceph performance.

Network Performance: All pod-to-pod and pod-to-storage communication runs over your included per-server 20Gbps private network, reducing latency for distributed applications and databases. This dedicated network infrastructure eliminates the bandwidth contention common in shared public cloud environments.

Root Access and Customization

With private cloud deployments, you gain full root access to your worker nodes, which supports additional performance benefits:

• System Tuning: Tune sysctl parameters for networking, memory management, and process scheduling to maximize performance for your specific application needs
• Specialized Drivers: Install monitoring, security, or storage drivers directly on the host OS to boost performance and security in ways impossible on locked-down managed services
• Hardware-Level Optimization: With bare metal worker nodes, you have BIOS-level access to tune CPU C-states, P-states, and other hardware settings for ultra-low-latency applications

Fixed-Cost Predictability

Private cloud operates on a fixed-cost model where you pay a single, predictable monthly price for dedicated hardware and worker nodes. Your bill doesn’t change based on CPU usage or the number of pods you run. OpenMetal customers who move over from public clouds typically reduce their cloud bill for workloads by approximately 50%.

This predictability extends to bandwidth costs. Private cloud tiers include generous bandwidth allowances – up to 6Gbps/925 TB of monthly egress. If you exceed the included egress allotment, additional bandwidth costs only $375 per extra Gbps (approximately 180TB), far lower than public cloud providers.

Architecture and Deployment Considerations

Kubernetes Deployment Options

From many conversations with various engineers one tool is at the tip of everyone’s tongue: Rancher. Rancher is a comprehensive software platform that provides a unified interface for managing Kubernetes clusters. Most teams use kubeadm or Rancher to manage Kubernetes clusters on our private cloud infrastructure, with engineering support available through the setup and tuning processes.

Integration Ecosystem

According to Thierry Carrez, General Manager of the OpenInfra Foundation, “more than two-thirds of OpenStack deployments leverage the integration of OpenStack and Kubernetes, with tens of millions of cores globally implementing that open infrastructure blueprint”. This widespread adoption demonstrates the maturity and reliability of the private cloud approach.

Private clouds seamlessly integrate with a wide range of tools and services thanks to being open source. You can easily connect your Kubernetes clusters with monitoring tools, automation systems, and CI/CD pipelines without vendor-specific limitations.

When Private Cloud Makes Financial Sense

Break-Even Analysis

The cost advantages of private cloud become more pronounced as your infrastructure needs grow. While single, small applications may benefit from the pay-as-you-go models of EKS and GKE, scaling workloads quickly tip the economics in favor of private cloud.

Resource Utilization: With public cloud, you rent virtual “slices” of large, multi-tenant infrastructure. Your costs scale directly with every new worker node, gigabyte of storage, and data transfer. With private cloud, you get a complete single-tenant environment built on dedicated servers, with far more resources available than your Kubernetes workload may require.

Resource Reclamation: In public cloud environments, your unused resources are often reclaimed by the provider to be resold to other users. With private cloud, you lease all the resources of the hardware, not just the virtual resources. When your VMs aren’t consuming their maximum allocated resources, those previously “wasted” resources remain accessible for use by your other applications.

Compliance and Security Benefits

This is especially important for businesses operating in highly regulated industries such as healthcare and banking. This is why security and compliance are important when choosing infrastructure to host Kubernetes workloads. Private cloud infrastructure supports compliance needs such as HIPAA, SOC 2, and ISO 27001 for teams deploying sensitive workloads.

The security advantages extend beyond compliance frameworks. If you deploy Kubernetes on OpenStack, you’re handling every piece of security including: networking, control plane (ETCD, scheduler, controllers, etc.), worker nodes, storage and everything else that comes with creating a Kubernetes cluster.

Real-World Success Stories

Enterprise Adoption

The private cloud approach for Kubernetes isn’t theoretical – it’s proven in production at scale. During our research, we came across an article that showed the Mercedes (car manufacturer) tech team was running over 900 Kubernetes clusters, and they were all running on OpenStack.

Mercedes chose this approach because they needed automated workflows combined with infrastructure management and network implementations. They required specific specs, node sizes, and on-demand clusters without waiting for quota limits to be lifted. For them, Kubernetes became a true platform requiring complete control.

Telecommunications Use Cases

Diving in a bit deeper, we also looked at Telco providers, and some of the same rules applied for Telco as they do for Mercedes. Telco providers want a way to manage their infrastructure in a cloud-native fashion, but while managing the infrastructure. Think about Telco providers – they have a lot of network traffic going back and forth constantly. They can’t allow that to be in control by a third party.

Making the Transition

Planning Your Migration

Moving from managed Kubernetes to private cloud requires careful planning and execution. Unlike colo or raw IaaS solutions, modern private cloud platforms include Day 2 support, bandwidth, storage, and bare metal access in a unified platform.

Assessment Phase: Begin by analyzing your current Kubernetes workload patterns, performance requirements, and cost structure. Identify applications that would benefit most from dedicated resources and consistent performance.

Pilot Deployment: Start with a subset of your workloads to validate performance improvements and cost savings before migrating critical applications.

Support and Expertise

The increased responsibility of managing your own infrastructure comes with access to dedicated engineering support with OpenMetal. Teams have access to one-on-one engineering support through both regular support channels and a dedicated Slack channel. We also offer ramp periods and migration assistance to make the transition seamless.

Cost-Benefit Analysis Framework

Evaluating Your Workload

To determine if private cloud makes sense for your organization, consider these factors:

Current Spending: Calculate your total monthly costs including control plane fees, worker nodes, storage, and data egress charges across all your Kubernetes clusters.

Growth Trajectory: Project your infrastructure needs over the next 12-24 months. Private cloud economics improve significantly as you scale.

Performance Requirements: Identify workloads that suffer from inconsistent performance, storage throttling, or network latency in your current environment.

Compliance Needs: Factor in any regulatory requirements that mandate specific data location, security controls, or audit capabilities.

Total Cost of Ownership

When comparing costs, include both direct and indirect expenses:

• Direct Costs: Hardware, software licenses, bandwidth, and support
• Operational Costs: Staff time for management and maintenance
• Opportunity Costs: Lost productivity due to performance limitations or vendor lock-in
• Risk Costs: Potential business impact from outages or security breaches

Performance Optimization Strategies

Network Architecture

For organizations operating across multiple cloud environments, OpenStack’s Neutron drivers provide a way to maintain consistent network policies across different clouds. OpenMetal simplifies hybrid cloud networking by combining OpenStack’s Neutron with Kubernetes CNI plugins.

Implementing dedicated networks for different types of traffic – cluster, public, and client – reduces contention and improves overall performance.

Storage Configuration

Your storage configuration should reflect the specifics of your production setup. Choose between erasure coding and replication based on your workload. Replication generally performs better in write-heavy scenarios, whereas erasure coding is better suited for read-heavy workloads.

Future-Proofing Your Infrastructure

Scalability Considerations

Without proper scalability, Kubernetes would only be able to work in any environment for a certain period of time. Once the Worker Nodes get to a certain limit from a resource (CPU, memory, etc.) perspective, Pods will start to crash, not start, and applications (both internal and customer-facing) will be offline.

Private cloud provides the foundation for sustainable growth without the constraints of shared infrastructure or vendor-imposed limitations.

Technology Evolution

The open source nature of private cloud platforms ensures you’re not locked into proprietary technologies or vendor roadmaps. This symbiotic relationship is a globally adopted blueprint that continues to evolve with industry needs and technological advances.

Wrapping Up: Kubernetes on a Private Cloud

The choice between managed Kubernetes services and private cloud isn’t just about current costs – it’s about positioning your organization for sustainable growth, predictable performance, and operational flexibility. While EKS and GKE may seem appealing for small, single applications, the economics and performance advantages of private cloud become compelling as your Kubernetes footprint expands.

Private cloud delivers measurable benefits: 50% cost reduction, consistent performance through dedicated hardware, complete infrastructure control, and compliance-ready security. These advantages compound over time, creating increasingly favorable total cost of ownership compared to managed services.

For organizations ready to move beyond the limitations of shared infrastructure, private cloud Kubernetes solutions offer a proven path to better performance, lower costs, and greater control. The question isn’t whether you can afford to make the transition, it’s whether you can afford not to.

Ready to explore how private cloud can transform your Kubernetes infrastructure? Discover OpenMetal’s turnkey Kubernetes solutions or learn more about the differences between OpenStack and Kubernetes to understand which approach fits your needs.