News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
You are here: Home / Cloud Computing / Amazon Cuts Its Own Cloud Prices
DDoS Protection Powered By Verisign
Amazon Web Services' Price Cuts Fuel Cloud Wars
Amazon Web Services' Price Cuts Fuel Cloud Wars
By Seth Fitzgerald / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
MARCH
26
2014


The price war among cloud storage and compute providers is continuing, with Amazon Web Services announcing a 51 percent average price cut Wednesday on its S3 storage service. The cuts come one day after Google announced its own cuts.

Amazon also said it was making its desktop-as-a-service generally available, which could potentially raise the stakes for Microsoft's OneDrive and Office offerings in the cloud. And the Seattle-based Amazon said it was reducing prices on other services by a range of 28 percent to 61 percent, depending on the service.

The announcements were made at an AWS conference in San Francisco focused on the S3 service. The company also said its U.S.-based offerings had received a new security-level rating issued by the U.S. Department of Defense.

While Google started this latest price war, a new report from RightScale, which helps clients manage their cloud costs, found that Amazon dominated the industry with more than a dozen price reductions in 2013, which helped to push the company into its market leadership position. Cloud storage and compute providers have become a major part of the technology industry.

RightScale's report, updated with Amazon's latest cuts, shows Google still cheaper for on-demand use, but Amazon cheaper for "reserved instance" use, in which a company estimates and pays a subscription price for its predicted usage.

Setting Aside Forecasting

James Staten, principal analyst with industry research firm Forrester, notes in a recent blog post that forecasting is becoming more difficult and is not the optimal model to use. AWS and Microsoft require businesses to predict what their usage will be prior to discounts being applied to the total bill.

"Predictability is going down," Staten said in the blog post. "In the current Age of the Customer you have to change your Systems of Engagement faster, not slower. You have to do more analysis, more often, on larger sets of data to really understand customer behavior."

Google has effectively removed the need for businesses to predict usage each billing term as a result of its new sustained-use discounts. This pricing structure allows businesses to receive discounts automatically based upon how much they actually use rather than providing advance estimates, which are frequently inaccurate.

Price Wars

With the exception of a handful of features, all the major cloud providers offer similar services. This has resulted in some companies turning toward price as a way to differentiate themselves, but in the end, performance is what really matters on the enterprise level. Google generally has fewer options and features than Microsoft Azure or AWS, but when it comes to reliability those services are similar.

This means that making cloud storage and compute services easier to use and cheaper is what cloud providers will have to focus on this year. The latest price cuts by Google and AWS, combined with ones in December, have made enterprise-level compute services far cheaper. On top of that, Google's cloud storage has dropped in price to just $0.026 per gigabyte per month, compared with AWS at $0.03 after its price cuts Wednesday.

"Together we are resetting the price curve in the cloud to where it should be," said Google Senior Vice President Urs Holzle. "This is a philosophy. The price curve of virtual hardware should follow the price curve of real hardware."

As impressive as Google's prices now are, its market share has lagged behind AWS, which remains the most popular cloud provider among data-intensive businesses. Now that a price war is in effect, cost and feature advantages may seesaw throughout 2014.

Tell Us What You Think
Comment:

Name:

Like Us on FacebookFollow Us on Twitter
TOP STORIES NOW
MAY BE OF INTEREST
Salesforce.com is the market and technology leader in Software-as-a-Service. Its award-winning CRM solution helps 82,400 customers worldwide manage and share business information over the Internet. Experience CRM success. Click here for a FREE 30-day trial.
MORE IN CLOUD COMPUTING
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Are Government Spies Tipping Off Tor?
Less than a month ago, tech news headlines heralded a Tor Project breach. Now, some are saying that government spies are sharing information with Tor to help it prevent future breaches.
 
Backoff Malware Hits 1,000+ Businesses, Likely More
More than 1,000 businesses across the U.S. might have been affected by Backoff, a new kind of point-of-sale (PoS) malware, according to the Department of Homeland Security.
 
PlayStation Network Back Online After Attack
Sony’s PlayStation and Entertainment Network are back online after a distributed denial of service (DDoS) attack crashed the systems on Sunday. But Sony says no personal info was accessed.
 

Enterprise Hardware Spotlight
Apple Set To Release Largest iPad Ever
Tech giant Apple seems to have adopted the mantra “go big or go home.” The company is planning to introduce its largest iPad ever: a 12.9-inch behemoth that will dwarf its largest existing models.
 
Alert: HP Recalls 5 Million Notebook AC Power Cords
HP is recalling about 5.6 million notebook computer AC power cords in the U.S. and another 446,700 in Canada because of possible overheating, which can pose a fire and burn hazard.
 
Acer's New Desktop Box Rides the Chrome OS Wave
Filling out its Chrome OS line, Acer is following the introduction of a larger Chromebook line earlier this month with a new tiny $180 desktop Chromebox and also a smaller Chromebook.
 

Mobile Technology Spotlight
Apple Set To Release Largest iPad Ever
Tech giant Apple seems to have adopted the mantra “go big or go home.” The company is planning to introduce its largest iPad ever: a 12.9-inch behemoth that will dwarf its largest existing models.
 
Verizon Hops on the Voice-Over-LTE Bandwagon
Wireless provider Verizon is gearing up for a nationwide launch of its Voice-over-LTE service over the next several weeks, promising clearer and crisper phone calls and a Skype-like video service.
 
Smartphone 'Kill Switch' Law in California; Will Other States Follow?
California’s new law -- signed by Gov. Jerry Brown on Monday -- aimed at deterring cellphone theft could mean most mobile phones sold in the U.S. will soon include similar “kill-switch” tech.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.