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...
APC Free White Paper
Optimize your network investment &
Enter to win a Samsung Galaxy Note

www.apc.com
Data Storage
Next Generation Data Center Is Here!
Average Rating:
Rate this article:  
Amazon Web Services
Amazon Web Services' Price Cuts Fuel Cloud Wars

By Seth Fitzgerald
March 26, 2014 3:07PM

    Bookmark and Share
A report by RightScale, updated with Amazon's latest cuts for its cloud and compute services, 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. Amazon announced a 51 percent cut for its S3 storage service.
 



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:



Get Powerful App Acceleration with Cisco. In a world where time is money, you need to accelerate the speed at which data moves through your data center. Cisco UCS Invicta delivers powerful, easy-to-manage application acceleration for data-intensive workloads. So you can make decisions faster and outpace the competition. Learn More.


 Data Storage
1.   Cloud Firms Offer Azure Starter Kit
2.   Amazon Intros Zocalo Storage Service
3.   EMC Moves Toward Hybrid Cloud
4.   Oracle Boosts ZS3 Storage Server Line
5.   Fusion-IO Deal Speeds SanDisk Shift


advertisement
Amazon Intros Zocalo Storage Service
Online storage and sharing for business.
Average Rating:
EMC Moves Toward Hybrid Cloud
Buys TwinStrata; debuts VMAX3 storage.
Average Rating:
Cloud Firms Offer Azure Starter Kit
Carpathia, Equinix partner on launch.
Average Rating:


advertisement
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
New 'Backoff' Malware Slips Undetected into Retail Systems
'Malicious actors' are using a new variety of malware to access consumer payment data remotely through point-of-sale systems, according to a report from the Department of Homeland Security.
 
IBM Beefs Up Identity Intelligence Security Solutions
Big Blue is betting big on identity intelligence. IBM just acquired a private firm with security software to govern user access to apps and data across cloud and on-premise environments.
 
USB Security Flaw Lets Hackers Hijack PCs
Hackers can use the firmware that controls USB functions to take control of computers, say security experts. That means there may be a new class of attack for which there are no defenses.
 

Enterprise Hardware Spotlight
AMD's ARM-Based Opteron Out in $3K Dev Kit
It's dubbed "Seattle" and it's AMD's first 64-bit ARM-based Opteron processor. The low-power chip is being released as part of AMD’s Opteron A1100-series developer kit, and aimed at high-end data center needs.
 
Apple Updates MacBook Pros, Cuts Prices Up to $100
The popular MacBook Pro laptop line just got an update and a price cut of as much as $100. The MacBook Pro with Retina display now includes faster processors and double the memory.
 
Dell, BlackBerry Not Sweating Apple-IBM Alliance
IBM's recent move to partner with Apple to sell iPhones and iPads loaded with corporate applications has excited investors in both companies, but two rivals say they are unperturbed for now.
 

Mobile Technology Spotlight
BlackBerry Messenger Now Available on Windows Phone
BlackBerry's free Messenger chatting and voice app is out of beta and widely available for Windows Phone users, the company said. BBM offers secure messaging, Groups, Voice, Channels and more.
 
Virgin Mobile Offers Custom Smartphone Plans
As the wireless carrier wars continue heating up, Virgin Mobile just threw the customization coal onto the fire. The firm has debuted a no-annual-contract plan with rates based on individual use.
 
Collaboration Provider Asana Revamps Mobile App
Asana, a collaboration software provider started by a Facebook founder, is now out with a rebuilt native iOS mobile app. It replaces one that even the company admits was not up to par.
 

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.