Blog Post

Amazon gets out its price chopper (again)

Let it never be said that Amazon Web Services rests on its laurels. On Tuesday the public cloud leader launched a bunch of price cuts, slicing the price on standard Elastic Block Storage (EBS) and I/O requests by as much as 50 percent in some cases. It also cut prices on S3 storage by up to 22 percent. This is the 40th time it said it’s cut prices since launching 8 years ago, although frankly that seems like an undercount.


Update: Microsoft will meet these price cuts, as promised last year. In an emailed statement to remind me of this, a spokeswoman said: “As we stated last April, Microsoft will match AWS prices on commodity services like compute, storage and network to ensure Windows Azure customers continue to receive market leading value in terms of price for performance along with all the benefits of our cloud platform.”

Also new are medium and large “M3” general-purpose instances based on Intel Xeon Sandy Bridge or Ivy Bridge processors. Compared to the older M1 instances, M3 instances offer faster clock speeds, better memory performance and SSD-based storage, according to Amazon.

“… Compared to the venerable M1 instance type, the M3 instances offer higher clock frequencies, significantly improved memory performance, and SSD-based instance storage, all at a lower price. If you are currently using M1 instances, switching to M3 instances will provide your users with better and more consistent performance while also decreasing your AWS bill. We reduced the prices for the M3 instances late last year and they are now more cost-effective than the M1 instances.”

aws m3

Amazon continues to cut prices and roll out features but its rivals are hardly standing still. IBM(s ibm) blew its own horn last week, announcing plans to spend $1.2 billion to expand its cloud data centers worldwide. And upstart competitors like Digital Ocean have the audacity to claim they offer cheaper cloud capabilities in more user-friendly packaging.

Still AWS has a pretty handy head start and a prodigious lead in cloud, by almost any reputable account.

Note: This story was updated at 11:23 a.m. PST January 22 with Microsoft comments.

5 Responses to “Amazon gets out its price chopper (again)”

  1. Price is not everything. Digital Ocean is very cheap but also very bad. Their amateuristic approach can not be used for serious business. Look at the security problems. At Digital Ocean we had more downtime in one month than we had in 3 years with Rackspace and Leaseweb.

  2. Phil Dunn

    Sounds like the x86 business all over again. It’s a price war and in the end, no one wins-maybe just the customers for a short while, but they’ll pay in the end. Just look at any of the vendors that depended on selling x86 servers. HP, Dell, IBM, Cisco *and* even Intel and AMD are all suffering due to price erosion, and lack of margin to sustain the business. IBM even wants to sell off its x86 business because of it, and Oracle has already stated that it doesn’t want to compete in x86 market. Without margin, you can’t invest in R&D. Eventually, theres no profit to reinvest in R&D and so future competitive advantages are lost. Eventually, just like the commodity x86 server business, I believe that cloud businesses will be commoditized and so they can only survive for so long. Luckily for Amazon, they have a healthy retail business. Not so sure others will have such safety nets.

  3. This makes S3 very price competitive with Google Storage. It’s good to see big vendors like Google and Amazon pushing down the prices like this – the kind of thing they can do with what are now essentially commodity services: compute and storage. The real differentiation is now in the supporting services around those core, base products.