Rackspace: Hey Amazon, we can cut prices too

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As if to prove Amazon isn’t the only price chopper in cloud, Rackspace on Friday cut prices on a key cloud service and is starting to roll out tiered pricing for other services.

First off, it sliced the cost of its Content Delivery Network (CDN) services by a third from $0.18 to  $0.12 per GB. The new, lower price matches Amazon CloudFront CDN on-demand per-GB pricing for the first 10 TB per month of out-bound data transfer. CloudFront prices drop after that.  Amazon does not publish its reserved pricing for CloudFront. CDNs route traffic around the web to put it closer to prospective users thus reducing latency and page load times.

Secondly, the new tiered price structure will first apply to Cloud Files Object storage with volume discounts ranging from $0.10 per GB per month for up to 1 TB, then falling to $0.075 per month or lower when storage surpasses a petabyte (see chart.)

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For comparison, AWS S3 storage prices are lower, but, as Rackspace likes to note, Amazon also charges for PUT, POST, LIST, HEAD, GET and DELETE requests and Rackspace does not.

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This move shows that Rackspace, with its new OpenStack-based cloud services, is bound and determined to compete with the biggest of the big cloud players. In the past the company has seemed reluctant to compete on price alone, instead invoking its “maniacal fanatical support” mantra to justify a premium.”

“Rackspace has always responded to AWS price cuts with statements like ‘but we have great service.’    Looks like the market is demanding the cuts,” said David Linthicum, CTO and founder of consultancy Blue Mountain Labs and a GigaOM PRO analyst.

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