Amazon Responds To Google’s Price Cut For Cloud Services, Nearly Halves The Rates

Amazon Inc. responded to Google’s price cut of Cloud Services by halving the tariffs for its own similar services.

In a direct response to Google’s attempt at undercutting Amazon’s Cloud Services, the latter swiftly announced significant reductions, reported The Register. The entire line–up of Cloud Based Services, which collectively come under Amazon Web Services will now be at least 40–50 percent cheaper than their earlier pricing.

Merely twenty hours after Google’s announcement, Andy Jassy, Senior Vice President, Amazon Web Services, unveiled a 30 to 50 percent drop on its Elastic Compute Cloud (EC2), which offers a lucid and dynamic cloud based platform that enables companies to run complex software without installing on desktops. Meanwhile, Simple Storage Service (S3), a way of merely storing data on cloud based storage saw a drop of 51 percent in tariffs. If that’s not all, Jassy even signaled a drop of as much as 61percent on Elastic MapReduce (EMR), a powerful computational platform that analyzed Big Data.

It is important to note Amazon Web Services is currently the world’s largest cloud computing business. Though there are other players including Google, HP, etc.; Amazon has been able to attract and retain customers because of its pioneer timing.

Amazon’s reductions may be higher than that of Google’s, but the former’s pricing slabs are still higher than that of Google, and that is certainly a challenge that Amazon will have to face in the immediate future. Additionally, Amazon doesn’t seem to have made the new pricing ‘simple’ or ‘attractive’ enough.

Both Amazon’s and Google’s Cloud Services have become quite essential for tech startups as these companies offer variable pricing and extend flexibility, even in capacity requirements, allowing companies to scale–up or down as per demand and requirement. The modern internet world routinely experiences ebb and flow of traffic, and tech companies can certainly benefit by booking more or less slabs of computational services as demand varies. However, a different set of industry experts are advocating calculating the approximate need, and just buying the hardware.

Despite the arguments, cloud services like that of Amazon, Google or anyone else have allowed small companies to think big, while staying light on their operational and infrastructural expenses and paying only for what was consumed, leaving no ‘idle time’ or ‘unused quota’.

While these reductions are very welcome, do they mean these companies were initially charging very high rates and are merely reacting to the changing market dynamics and competition pricing?

[Image Credit: Wired]