Advanced Computing in the Age of AI | Monday, July 22, 2024

AWS Counters Google With Its Own Price Cuts 

The cloud pricing wars are hotter than ever. Yesterday Google announced some major price cuts from its live event in San Francisco, and today Amazon Web Services got out its red pen and chopped prices.

At the AWS Summit in San Francisco, AWS senior vice president Andy Jassy took to the stage to detail the broad AWS portfolio and the pricing reductions. Jassy downplayed the idea that the price cuts – the 42nd reduction since 2008 – were competitive in nature.

"Lowering prices is not new for us,” Jassy said. “It is something we do on a regular basis. Whenever we can take costs out of our own cost structure, we give them back to our customers in the form of lower prices. We should expect us to continue to do this."

Amazon announced that effective April 1, 2014, customers will see cheaper prices for Amazon EC2, Amazon S3, the Amazon Relational Database Service, and Elastic MapReduce. Prices for On-Demand and Reserved Instances will also go down.

Pricing on the S3 storage service in the US Standard Region will be reduced by 51 percent on average. The Elastic Compute Cloud (EC2) compute service prices were cut between 10 and 38 percent, depending on the instance family. Amazon announced price drops of 28 percent for its relational database service, Amazon RDS, and 27 to 61 percent cuts for its Elastic MapReduce service, which is a Hadoop cluster that Amazon runs on the behalf of customers. The cost of ElasticCache cache nodes will drop by an average of 34 percent.

“With this price reduction, you can now run a large Hadoop cluster using the hs1.8xlarge instance for less than $1,000 per terabyte per year (this includes both the EC2 and the Elastic MapReduce costs),” notes AWS chief evangelist Jeff Barr in a blog.

The cloud giant is starting to come around to the PaaS idea. Over the years, AWS has puffed up its higher-level cloud services to the point where they can be layered into what is essentially a Platform-as-a-Service setup, but the vendor shied away from this term, until now. Today Jassy acknowledged that AWS basically has PaaS, signaling a change in public messaging.

Amazon also played up its diverse customer base, which includes General Electric, BP, and Netflix as well a plethora of technology startups, like Pinterest and Airbnb. These companies have decided that at least for certain workloads it is better to leverage Amazon's servers and datacenters rather than build, equip, and manage their own.

Amazon was also touting the news that Amazon Web Services received provisional security authorization from the U.S. Department of Defense for all AWS regions in the United States, meaning more federal agencies and companies that do business with the U.S. government will be able to use the service.

One of the most important announcements from a competitive perspective is that WorkSpaces, Amazon's Desktop as a Service offering, is now in general availability. In limited preview since November, beta customers included Peet’s Coffee & Tea, ERP and CRM solution provider WorkWise, and some 10,000 other trial users. WorkSpaces is available on Mac and PC platforms, as well as many mobile platforms, including iPad, Android, and Amazon’s Kindle tablets.

With a DaaS offering, AWS is now in a position to take market share away from VMware and Citrix Systems. Pricing, which runs between $35 and $75 per WorkSpace per month depending on provisioning, is competitive. An add-on called WorkSpaces Sync functions much like Dropbox and a good example of how AWS layers its services. This client-side software backs up user documents created in a WorkSpace to Amazon S3.

While customers are price-sensitive, the cloud wars cannot be solely a race to the bottom, especially not if cloud is to make in-roads into the enterprise. Amazon, more than its competitors, has had time to build up a rich array of services, which it also prices competitively.

“It’s not just the services, it’s features and capabilities in these services,” Jassy emphasized. “We’re adding and iterating features at a fast clip.”

About the author: Tiffany Trader

With over a decade’s experience covering the HPC space, Tiffany Trader is one of the preeminent voices reporting on advanced scale computing today.