AWS, Rackspace cloud pricing battle: The red herring of IaaS

Grazed from TechTarget. Author: Beth Pariseau.

Infrastructure as a Service providers continue to cut cloud pricing in an effort to lure new customers, but many corporate cloud customers see this race to the bottom as a marketing stunt — and they won’t take the bait. Amazon Web Services cut dedicated instance prices in mid-July, which was quickly followed by a Rackspace Inc. blog post that questioned whether AWS’ dedicated instances are truly dedicated at all, and claimed a price and performance advantage.

Into this fray then stepped another Infrastructure as a Service (IaaS) provider, Cambridge, Mass.-based ProfitBricks Inc., whose executives accused both AWS and Rackspace of being less than truthful about gross margins for cloud services. ProfitBricks also cut its own IaaS prices by 50%…

While customers are aware of intensifying cloud pricing competition and think it’s healthy for the market as a whole, it doesn’t mean they will drop their current service provider to seek lower costs elsewhere. "There’s a lot more to the decision than that," said Phil Jones, vice president for Bluebird Auto Rental Systems, a Dover, N.J.-based firm that handles credit card transactions for auto rental centers worldwide…

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