According to a post this morning on the Amazon Web Services Blog, the Amazon S3 service has grown so much over the last year, that the company has decided to lower the pricing on storage. The growth from quarter to quarter has been dramatic: S3 now stands at 29 billion objects, up from 22 billion just a quarter ago. The service has also stayed busy with peak usage on October 1st at over 70,000 storage, retrieval, and deletion requests per second.
Because of the increases in usage, Amazon has decided to lower the costs for storage. The new model features 4 pricing tiers, as follows:
Amazon will continue to offer the pricing under the "pay what you use" model where there is no minimum fee or long term equipment required.
According to Alyssa Henry, general manager of the Amazon Simple Storage Service, ""The growth of Amazon Web Services has allowed us to become even more efficient and further lower our operating expenses. AWS remains committed to passing savings along to our customers. Just six months ago, we announced a reduction in data transfer costs, and today we're pleased to pass new storage savings along to our customers."
But it's clear that this pricing change is more than a simple "pass the savings on to you" move by the company. Since the company formerly had a flat pricing plan, the new tiered pricing and volume discounts makes it clear that Amazon is looking to edge out their competition. The service now also looks more appealing to the enterprise who may have felt that, before, there was not enough of a savings to use cloud storage as opposed to host-your-own storage behind the firewall.
The new pricing goes into effect November 1st, 2008.
Comments
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It's nice that they are decreasing prices, but how many customers actually hit 50 TB a month. Maybe 50 GB per month, but 50 TB! I can't imagine too many customers of their's using that much data, but maybe I'd be surprised.
Posted by: Scott Hemmeter | October 9, 2008 8:11 AM
This is smart use of the strategy of "auto-cannibalizing" (i.e. eat your own margins before someone else eats it for you!) your margins to maintain and grow market share.
It is counter intuitive and contrarian (particularly in the current economic environment) but, when done right, works well in contributing to building a "wider economic moat" (Warren Buffet's words not mine!) and makes your business model and market share more defensible.
One industry where this technique is widely used in the generic pharmaceuticals industry. I owned a business in this domain so I guess I know a thing or two about application of this technique.
Posted by: Alexander Ainslie
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October 9, 2008 8:25 AM
In todays cutting-edge technology there is a very tough competition between organizations of same sectors.So, there should be discount in order to compete.
Posted by: Free Games | October 10, 2008 1:46 AM