Amazon drops cloud prices as competition increases
March 8, 2012
You can now run a website for $250 a year, says Amazon. Amazon has announced it has dropped the price of its Web Services cloud computing platform. The company says it is the 19th price reduction in the last six years.
The price drop will be one Elastic Compute Cloud (EC2), Amazon Relational Database Service (RDS), Elastic MapReduce and ElastiCache, the company said.
In a statement Amazon said the new prices mean that running a website on an m1.small instance with a High Utilisation Reserved Instance can cost $250 per year, whereas a website on the same set-up six years ago would have cost nearly $900…
"Driving costs down for our customers is part of the DNA of Amazon and therefore also part of the DNA of AWS," said Amazon.com’s CTO Werner Vogels. "We will continue to drive AWS prices down, even without any competitive pressure to do so. And we will work hard to do this across all the different services, such as the price reduction for Amazon S3 and EBS last month."
"Reducing pricing is not just a matter of passing on the benefits of economies of scale, although that certainly plays a role," Vogels continued. "We continuously apply all our innovative skills to the design of data centres, servers, storage, network, etc. to drive new efficiencies and higher reliability."
"With the new announcement, we have introduced volume discount tiers for Reserved Instances, which will provide additional discounts of 10% and 20%, both of which are in addition to the price cuts available to all customers, to further help customers drive down costs as they scale on AWS infrastructure," he said.
Jeff Barr, an Amazon Web Services Evangelist, added: "As we continue to find ways to lower our own cost structure, we will continue to pass these savings back to our customers in the form of lower prices. Some companies work hard to lower their costs so they can pocket more margin. That’s a strategy that a lot of the traditional technology companies have employed for years, and it’s a reasonable business model. It’s just not ours."
"We want customers of all sizes, from start-ups to enterprises to government agencies, to be able to use AWS to lower their technology infrastructure costs and focus their scarce engineering resources on work that actually differentiates their businesses and moves their missions forward," Barr said.
Although the company denied it, it seems likely that the move is an attempted to fend off growing competition from the likes of Rackspace and Microsoft’s Azure platform.