IT Scene and Changing Trends from an Indian Perspective

Udayan Banerjee

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Amazon AWS 19th Price Reduction – a Closer Look

How does the current price compare with what existed in January, 2010

If you have been following me regularly then you would know that I maintain that charges for cloud services are not coming down in proportion to the routine reduction of hardware cost. So, let us examine in Amazon has reversed the trend with its latest announcement of price reduction. On 6th March, 2012 Amazon announced:

“…a reduction in Amazon EC2, Amazon RDS, and Amazon ElastiCache prices. Reserved Instance prices will decrease by up to 37% for Amazon EC2 and by up to 42% for Amazon RDS across all regions. On-Demand prices for Amazon EC2, Amazon RDS, and Amazon ElastiCache will drop by up to 10%. We are also introducing volume discount tiers for Amazon EC2, so customers who purchase a large number of Reserved Instances will benefit from additional discounts. Today’s price drop represents the 19th price drop for AWS**, and we are delighted to continue to pass along savings to you as we innovate and drive down our costs…”

**since the launch of the service – (my addition)

How much of this (37%, 42%, 19th etc.) is sales talk and how much of it is reality? Let me just present the data that I have collected.

Have a look at the data you be the judge.

[Update: Why am I not surprised that Google drops the price of Cloud Storage service within a week?]

[Update: This was going to happen and it has happened within 10 days! Microsoft Trying Hard to Match AWS, Cuts Azure Pricing]

How does the current price compare with what existed in January, 2010
I had taken a dipstick of the prevailing AWS prices on Jan-10 which you can check here. There is no doubt that the breadth and the depth of offering has increased significantly, but we can still compare the price of those offering which existed then.

Here is a comparison between prices then and price now.

Jan-10 Mar-12
On-Demand Instances Small – Linux – N. Virginia $0.085 $0.080
Quadruple Extra Large – Windows – N. California $3.160 $2.504
Data Transfer – In Free till June 2010 Free
Data Transfer – Out Per GB depending on the total monthly volume $0.1 to $0.17 $0.05 to $0.12
Storage (EBS) Per allocated GB per month $0.10 $0.10
I/O Requests Per million I/O $0.10 $0.10

Price Reduction in last 3 years

I could locate 12 instances of price reduction announcement in last 3 years. Except for the current announcement all other have lowered price on only one element of AWS. Here is the summary:

  • On-demand instance: 2 Times (Mar-12 & Oct-09)
  • Reserved Instances: 2 Times (Mar-12 & Augt-09)
  • Storage: 3 Times (Mar-12, Feb-11 & May-10)
  • Data Transfer: 2 Times (Jul-11 & Feb-10)
  • Cloud Front: 2 Times (Jul-11 & Jun-10)
  • Cloud Watch: 1 Time (May-11)
  • Premium Support: 1 Time (Jan-11)

More Stories By Udayan Banerjee

Udayan Banerjee is CTO at NIIT Technologies Ltd, an IT industry veteran with more than 30 years' experience. He blogs at http://setandbma.wordpress.com.
The blog focuses on emerging technologies like cloud computing, mobile computing, social media aka web 2.0 etc. It also contains stuff about agile methodology and trends in architecture. It is a world view seen through the lens of a software service provider based out of Bangalore and serving clients across the world. The focus is mostly on...

  • Keep the hype out and project a realistic picture
  • Uncover trends not very apparent
  • Draw conclusion from real life experience
  • Point out fallacy & discrepancy when I see them
  • Talk about trends which I find interesting
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