Amazon Cuts Cloud Computing Prices

Amazon Web Services has lowered the price of its basic unit of on-demand computing by 5% to 10% and the price of its reserved instances--the workloads that promise one to three years of steady use--by up to 20%.

Jeff Barr, Amazon's senior web services evangelist, posted a blog about the reductions late Monday, with notice of the blog going out at 10:47 p.m. In it, Barr placed the cuts in a context of Amazon's ongoing effort to lower the cost of various services. Adam Selipsky, Amazon VP of product management, previously told InformationWeek in an exclusive interview that price cutting was part of the company's retail DNA.

But the leading cloud service supplier has also come under increased scrutiny recently for its pricing structure for some services, such as its S3 storage service. Art Wittmann, managing director of InformationWeek Reports, compared S3 pricing to the rapid decrease in the price per gigabyte of on-premises storage.

"In 2006, the cost of running a small website with Amazon EC2 on an m1.small instance was $876 per year. Today with a High Utilization Reserved Instance, you can run that same website ... at just $250 per year--an effective price of less than 3 cents per hour," Barr blogged. Amazon's entry level server, a small instance, is defined as a virtual CPU equivalent to a 2007 1-1.2 GHz Xeon processor with 1.7 GB of RAM and 160 GB of server disk storage.

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