Amazon Price Reduction

On Monday, Amazon Web Services (AWS) announced a price reduction.  Specifically, they reduced the cost of outbound bandwidth by two cents per GB for all pricing tiers.  At the lowest-volume pricing tier (10TB per month), this is about a 12% discount.  At the highest-volume tier (150 TB per month), the discount is nearly 20%.  Depending on how you are using AWS, this might not be that big of a deal.  But if, say, you are running a web application that consumes a lot of outbound bandwidth for page views and downloads, this could be a big deal.  What if half your AWS bill comes from outbound bandwidth?  You would suddenly be saving between 5% and 10% of your costs.

Amazon has done this a couple of times in the time I have been watching this solution.  They have lowered the cost of compute time, and also inbound bandwidth.  I can only assume that any IaaS vendor that is competing with Amazon will have to make similar reductions in prices.  I think that this behavior could be one of the greatest features of cloud computing.  Now, businesses lower their prices all the time.  In the computer world, we know that memory and disks will be cheaper next year than they were this year.  But knowing that the next guy is going to get a better price on a hard disk than you got is not that interesting.  On the other hand, knowing that your on-going operating cost for your cloud-based infrastructure is going to go down significantly, without you even having to change vendors or renew a long-term contract – well, that is pretty interesting.

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