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Summary:

They are not a huge surprise, but here they are: Amazon Web Services launched its 42nd round of price cuts slated to go live April 1.

Amazon SVP Andy Jassy said Germany would be a logical spot for new AWS region.
photo: Barb Darrow

You knew they were coming and here they are. A day after Google announced sweeping price cuts — plus a sustained use model that startups seemed to love — Amazon Web Services cut prices for the 42nd time in history.

The cuts range widely but the picture shows the averages.

aws price cuts
The news of these, the 42nd set of price cuts in the 8 years of Amazon’s cloud existence, came at the AWS Summit in San Francisco and ranged from an average of 51 percent cuts on S3 storage to 38 percent cuts on EC2 M3 compute instances. On Tuesday, Google which is launching a push for its Google Compute Cloud, unveiled dramatic price cuts of its own, taking on AWS at its own game. Stay tuned for more to come.

And, once again the numbers crunchers at RightScale bail me out with up-to-the-minute comparison of AWS new pricing vs. Google’s new pricing, which shows AWS three-year RIs as the cheapest option — but again, not many companies go for 3-year commitments because they don’t know what their needs will be. They also require a significant up-front investment.

rightscale1march26

When it comes to more commonly-used AWS one-year reserved instances, the price delta shifts to AWS.

ngew goog vs new aws

When it comes to on-demand compute instances, RightScale puts it at pretty much a draw at least at the N1-standard instance level; high-memory instances diverge.
rightscale2march26

So, it looks like AWS has its low-cost-provider crown back for the most part, but don’t hold your breath. As  SVP Andy Jassy told AWS Summit attendees earlier today, Amazon has cut cloud pricing tons of times “largely without any competitive pressure.” Now that there is competitive pressure, I’m betting the speed of those changes will accelerate.

 

Cloud Week 2014 ticker

This story was updated with RightScale’s pricing comparisons.

  1. Now I’m waiting for the 50% Dropbox price cut to reflect this dramatic fall in their backend costs…

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  2. How do these public cloud companies ever make money while trying to price each other out constantly? The ultimate winner will be the one that cuts the price (therefore its profit) to the lowest.

    It does not take a market genius to see they are going the way of PC OEMs, folks. Good for you if you are a user of public clouds but I’ll assert here none of the public cloud company will profit much despite all the hype about it. They will have to go the SAAS (and / or PAAS) route to search for profitablity.

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    1. It more than likely reflects a maturity in the technology that they are able to mass produce the computing components more cheaply, reduce human cost to manage, even gain some energy savings by reducing computing heat and advances in data center cooling.

      Even Microsoft is making money in the cloud and they just started in. They are no where near the PC industry/airlines cut throat market shares.

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    2. Lothar Scholz Thursday, May 1, 2014

      It’s still 2000% more expensive then what you pay for a dedicated server hosting.
      $4320 for only the CPU which you now get in a full server that costs $140 on EBay and this does not include the disks and traffic.

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  3. I’m not sure how Amazon is going to win a price war. Amazon doesn’t make a profit in any of their business unlike their competitors. Companies like Google, IBM, Microsoft, etc have extremely profitable business in other areas. So they could sell cloud at a loss if they wanted to. Amazon on the other hand can’t seem to make a profit in anything they do. How is Amazon going to sustain itself when all their business make no profits?

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  4. Tudor Lapusan Thursday, March 27, 2014

    Hi folks,
    I’m pretty sure that these companies will find ways to make o lot of money.
    In 10 years, when almost all of us will have virtual computers in the cloud, they will make a lot of many from us.
    I dont want to wait for 10 years, so I’m gonna buy my RI very soon.
    It’s a little expensive for me now, but I just want to accommodate with the future ;)

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  5. cheap spying on sale, but nobody’s buying

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  6. Well pricing is definitely people look at while deciding on a vendor and this price war is going to remain. Other thing which is more important is the maturity of platforms, so on Amazon one can find a larger basket of services across more number of regions and availability zones which basically allow for faster time to market.

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  7. Googles high-cpu instances doesn’t map very well to AWS instances. The AWS instances have twice the amount of RAM which probably explains AWS being more expensive there as it’s not a completly fair comparison.

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