Why Did Amazon Cut Cloud Computing Rates? Part II
Of course, the explanation behind the price decrease may be as simple as economies of scale. After all, the amount of data stored in S3 did triple in 2011, marking its fastest year of growth since 2006. At the same time, the challenge posed by smaller, yet rapidly growing rivals cannot be discounted. Hence, this move may also have been to leverage its first-mover advantage to stave off competition. Even with the more recent EC2 price decreases, Amazon has described it as passing on cost savings to its customers.
Amazon’s Jeff Barr wrote: “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….”…