Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Please click for more information, or scroll down to pass the ad, or Close Ad.
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Vblock™ Systems:
Advanced converged infrastructure
increases productivity & lowers costs.

www.vce.com
Enterprise I.T.
Tame your scariest paperwork. Find Out How
Average Rating:
Rate this article:  
Cloud Provider ProfitBricks Declares War on AWS Pricing
Cloud Provider ProfitBricks Declares War on AWS Pricing

By Barry Levine
August 1, 2013 10:37AM

    Bookmark and Share
Is ProfitBricks' dramatically lower pricing enough to cause developers to choose ProfitBricks over Amazon Web Services? Michael Facemire, an analyst with industry research firm Forrester Research, told us that developers are not so much inclined to go with a cloud brand name like Amazon as they are to "follow known working patterns."
 


Is Amazon Web Services raking in profit, although it's been proclaiming it has low margins? A smaller Infrastructure-as-a-Service company is cutting its prices in half, and claims that the prices for Amazon and other cloud giants are not rock bottom.

Cloud computing company ProfitBricks co-founder Andreas Gauger said in a posting on its blog Thursday that "if you listen to the headlines, we're in the midst of a major cloud price war." He added that customers are told "that the big players, Amazon, Microsoft and RackSpace, are fighting a race to the bottom," with the key question being "how much cheaper can cloud pricing go?"

But, ProfitBricks says, it's "shadowboxing among giants." Gauger notes that Amazon Vice President Andy Jassy has said his business is not a high-margin one, with gross margins between 60 percent and 80 percent, and that the technology heavyweight has talked about its "razor thin margins."

Cutting in Half

Gauger wrote that ProfitBricks' pricing takes into consideration the fact that the cost of hardware is declining, even though, as a smaller company, "I am pretty sure that the prices we pay for hardware, data center space or energy are higher than Amazon and the other big players." He added that if his services were sold at the same prices as Amazon and RackSpace, his company would have gross margins "far higher than the quoted 60 to 80 percent."

Gauger said that, to back up his claim, ProfitBricks is now cutting its 1-year-old pricing on cores and RAM for all its customers by 50 percent, regardless of whether they are current customers or new ones. This means, for instance, that one core, 3.75 GB of RAM and 250 GB of EBS storage on Amazon EC2, which ProfitBricks quotes as $111.40 monthly, will instead cost $61.65 per month on ProfitBricks.

In terms of its technology, one of the ways that ProfitBricks has sought to distinguish itself is through the use of the faster InfiniBand technology instead of Ethernet, and all hardware at its facilities is equipped with dual InfiniBand network interface cards. The company has said it is the "first and so far only IaaS company using this technology."

ProfitBricks is based in Berlin, and its founders were involved with 1&1 Hosting, which is one of the largest Web hosting providers in the world and which was sold for $3 billion.

Not BMW

Is the dramatically lower pricing enough to cause the developers to choose ProfitBricks over AWS? Michael Facemire, an analyst with industry research firm Forrester Research, told us that developers are not so much inclined to go with a cloud brand name like Amazon as they are to "follow known working patterns."

He added developers "aren't going with Amazon because they're BMW," where the price bump is worth the brand name and assured quality, but because Amazon has "a known API, pretty good uptime," and a variety of processes and features with which developers are familiar.

Facemire said it was unlikely that a developer who was already working with AWS would move everything and learn new processes because of a price difference, although a developer who is not currently a customer of AWS might well consider ProfitBricks.

"For a developer," he said, cloud environments "are not yet a commodity."
 

Tell Us What You Think
Comment:

Name:

Prenthar:

Posted: 2013-08-02 @ 6:56am PT
ProfitBricks? Who?



APC has an established a reputation for solid products that virtually pay for themselves upon installation. Who has time to spend worrying about system downtime? APC makes it easy for you to focus on business growth instead of business downtime with reliable data center systems and IT solutions. Learn more here.


 Enterprise I.T.
1.   Lessons from Verizon's Threat Report
2.   Hortonworks, Concurrent To Partner
3.   APX Labs Aims To Put Glass in Business
4.   Malware Targets Facebook Users
5.   Zebra Buys Motorola Enterprise Biz


advertisement
Lessons from Verizon's Threat Report
Enterprises can learn a thing or two.
Average Rating:
APX Labs Aims To Put Glass in Business
$10M to fund Skylight app for device.
Average Rating:
Malware Targets Facebook Users
iBanking app spys on communications.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
What Verizon's Data Breach Report Can Teach Enterprises
It’s probably not a jaw-dropper, but cyberespionage is officially on the rise. And the use of stolen or misused credentials is still the leading way the bad guys gain access to corporate information.
 
Top Cyberthreats Exposed by Verizon Report
Beyond Heartbleed, there are cyberthreats vying to take down enterprise networks, corrupt smartphones, and wreak havoc on businesses. Verizon is exposing these threats in a new report.
 
Where Do Web Sites Stand, Post-Heartbleed?
A security firm says the vast majority of Web sites have patched themselves to protect against the Heartbleed bug, but now there are questions raised on the reliability of open-source programs.
 

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 | Small Business | 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 | XML/RSS Feed

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.