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. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Hardware
DDoS Protection Powered By Verisign
Average Rating:
Rate this article:  
Cloud Provider ProfitBricks Declares War on AWS Pricing

Cloud Provider ProfitBricks Declares War on AWS Pricing
By Barry Levine

Share
Share on Facebook Share on Twitter Share on Linkedin Share on Google Plus

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?



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.


 Hardware
1.   Price Wars Hitting Laptop Market?
2.   Have Net Routers Reached The Limit?
3.   Obama Boosts Government Tech
4.   Surface Pro Ads Aim at MacBook Pro
5.   Acer Chromebook Packed with Power


advertisement
Acer Chromebook Packed with Power
13-inch screen on under-$300 devices.
Average Rating:
Can Surface Pro Tablet Replace a PC?
Microsoft says yes with 12-inch Pro 3.
Average Rating:
AMD Debuts 64-Bit ARM Server Chips
New Opterons target data center needs.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Chinese Hackers Nab Info on Millions of U.S. Patients
A group of Chinese hackers has stolen the personal information, including names and Social Security numbers, of about 4.5 million patients at hospitals operated by Community Health Systems.
 
Premier FBI Cybersquad in U.S. To Add Agents
After helping prosecutors charge Chinese army officials with stealing trade secrets from major companies and by snaring a Russian-led hacking ring, the premier FBI cyber-squad is getting a boost.
 
Apple Opens iCloud Data Center in China
Treading lightly, Apple acknowledged it has started to store encrypted iCloud personal data of some Chinese users on servers in mainland China, operated by the state-owned China Telecom.
 

Enterprise Hardware Spotlight
Compression, Deduplication Come to Violin Concerto 2200
Violin Memory has announced that data deduplication and compression capabilities are now available on its Concerto 2200 solution. Typically, users will experience deduplication rates between 6:1 and 10:1.
 
Cisco Axes 6,000 Employees in Restructuring Plan
Faced with declining profits, Cisco is laying off up to 6,000 employees in the months ahead -- a whopping 8 percent of its global workforce. That's in addition to the 4,000 jobs Cisco cut last year.
 
Web Slows, Have Internet Routers Reached The Limit?
If you encountered problems connecting to the Internet on August 12, you weren't alone. Networking experts blame the wide-scale slowdown on outdated routing systems that are reaching their limits.
 

Mobile Technology Spotlight
Apple Stock Soars Ahead of iPhone 6 Launch
The imminent release of the iPhone 6 -- and maybe even an iWatch -- has sent Apple's stock soaring to new heights. Considering what else the firm could have up its sleeve -- the stratosphere may be the limit.
 
HTC Debuts Windows Phone Version of One M8 Smartphone
HTC is bringing the Windows Phone mobile OS to its flagship One M8 device -- the first time any mainstream flagship smartphone has been offered with a choice of operating systems.
 
Verizon Earns Top Rating in Mobile Network Comparison
A new report says Verizon Wireless was the top-performing U.S. cellphone service provider in the first half of 2014, on a nationwide and state-by-state basis, as well as in metro areas.
 

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.