Amazon Web Services cuts prices

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Amazon Web Services cuts prices

Amazon Web Services launched its first partner conference in a bold way this week, disclosing a 25 percent cut in cloud storage fees, a new data warehouse service, and a counterattack against "old guard" tech vendors who offer customers private clouds as an alternative to AWS's public cloud services.

Andy Jassy, AWS senior vice president, in a keynote speech at the AWS re:Invent conference in the US, said the 25 percent price cut will be across the board for Amazon Simple Storage service (AS3), effective December 1.

The cloud infrastructure provider can reduce prices, its 24th price cut since its inception in 2002, because of the economies of scale achieved with the expansion of its massive data centers, Jassy said.

"We have a virtuous circle," Jassy said. "As we have more customers using AWS, we buy more infrastructure, and as we buy more infrastructure, we've been lowering costs, which in turn attracts more customers."

AWS also unveiled Redshift, a new data warehouse service now in preview and already tested by Netflix and NASA. Jassy said enterprises are tired of paying high prices for data warehousing, while small companies can't afford the service. Redshift provides a low-priced, easily managed service for all sizes of companies, he said.

Redshift is available with either 2 terabytes or 16 terabytes of compressed customer data per node.

Pricing begins at $US0.85 per hour for a 2TB data warehouse, and can scale up to a terabyte. Reserved instance pricing is $US0.228 per hour or under $US1000 per terabyte per year, which Jassy said was less than one-tenth the price of other data warehouse pricing.

"When we launched AWS, we waited for reaction from the old guard," Jassy said. "First they said, 'This is nothing new. It's just virtualisation in the cloud.' Then they said, 'OK, it's not virtualisation.' Now they say, 'You can get the benefits of the cloud in your own private data centre.'"

Without mentioning them by name, Jassy made fun of "old guard" companies Oracle, IBM and HP by displaying parts of their logos along with quotes from unnamed executives from the companies. With their private clouds offerings that promise more secure and manageable services that can be run on-premise, these vendors miss the advantages of scale, agility and low costs offered by public cloud services, he said.

"If you go to a private cloud, you have none of these benefits," Jassy said.

This article originally appeared at

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