Cloud Price Wars: Are IaaS Players Finally Ready to Challenge Amazon?

Grazed from Wired. Author: Ryan Koop.

The race to $0 is heating up in the Infrastructure as a Service (IaaS) space:

• March 25th – Google fires the first salvo in the pricing wars at their Google Cloud Platform Live event by reducing GCE by 32% across all sizes, regions, and classes.
• March 26th – AWS quickly responds by reducing EC2, S3, RDS, ElastiCache, and Elastic MapReduce pricing effective April 1st.
• March 31st – Microsoft wants to play too and after renaming Windows Azure to Microsoft Azure, they are cutting prices on compute by up to 35% and storage by up to 65%.

Bingo. Bango. Bongo… Hey Rackspace, where you at? And this isn’t the start of the price wars either. Things started in 2012 and continued through 2013 (see RightScale’s solid cloud price analysis for 2013). The above is just the most reactive back-and-forth we’ve seen yet…

Is There Margin at $0?

Fiduciary responsibility will govern the cloud providers’ behavior over time. Some might operate at a loss for a period, but if their margin doesn’t rebound over time, their stock prices will drop. Those in management making the negative margin decisions will be replaced. At least that’s the idea…

Read more from the source @ http://insights.wired.com/profiles/blogs/cloud-price-wars-are-iaas-players-finally-ready-to-challenge-aws#ixzz2yKcPbGho

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