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Amazon Slashes Cloud Pricing Again

For the second month in a row, Amazon is cutting the price of its clouds offerings.

Amazon Web Services (AWS) is lowering the costs of its Elastic Compute Cloud (EC2), Relational Database Service (RDS) and Elastic MapReduce (EMR) offerings, it said this week.

This marks the 19th time AWS has reduced the prices of its cloud services since it launched them six years ago. Last month, AWS reduced the pricing for its Simple Storage Service (S3) and Elastic Block Storage (EBS) offerings.

The cuts will amount to a 6 percent savings for usage of the On-Demand version of EC2 and 33 percent for its Reserved Instance offerings. For RDS, Amazon is reducing On-Demand prices by up to 10 percent and Reserved Instances by up to 42 percent. AWS evangelist Jeff Barr provides a complete rundown in a blog post.

"Driving costs down for our customers is part of the DNA of Amazon and therefore also part of the DNA of AWS," said Amazon CTO Werner Vogels in a blog post. "We will continue to drive AWS prices down, even without any competitive pressure to do so. And we will work hard to do this across all the different services."

While Vogels may say there's no competitive pressure to lower Amazon's prices, the company's announcement comes just two weeks after Microsoft said it is lowering prices for some of its SQL Azure service and just months after simplifying prices for Windows Azure. Google this week also lowered its cloud storage pricing, PCWorld reported.

Nevertheless, Vogels insisted, "Reducing pricing is not just a matter of passing on the benefits of economies of scale, although that certainly plays a role...Experiences with the highly scalable, ultra-efficient supply chains of Amazon.com drive great new innovations in the highly redundant supply chains for AWS, which lead to new efficiencies that we can pass on to our customers. Also on the business model side, we continue to innovate, as the introduction of Reserved Instances and Spot Instances have helped customers make significant savings."

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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