Amazon Slashes EC2 Prices

As the cloud computing wars heat up, Amazon Web Services has once again dropped prices for its Elastic Cloud Compute (EC2) services. It cut prices for reserved Linux instances up to 27 percent.

InformationWeek’s Charles Babcock reported, “Amazon Web Services Monday reduced its prices on its lowest cost option, reserved instances, by ‘up to 27%.’ That means a reserved instance virtual server may cost 65% less than the comparable on-demand instance running on the AWS EC2 infrastructure at $0.06 per hour.”

The Register’s Timothy Prickett Morgan added, “The cuts are deepest on the high-memory instances, which will help customers interested in running in-memory database and other DRAM-intensive workloads. All three modes of reserved instance pricing – light, medium, and heavy utilization – are getting price cuts in all of the AWS geographies.”

V3.co.uk’s James Dohnert noted, “The price drops mark another in a string of discounts by Amazon for the EC2 platform. Amazon’s businesses model to reduce prices comes from its philosophy to focus on a wide user base instead of high margins.”

Ars Technica’s Jon Brodkin pointed out that this latest price reduction is unlikely to be welcomed by VMware, writing, “Last week, VMware’s top executives displayed just how worried they are about the competitive threat posed by Amazon’s cloud computing service. With customers able to spin up virtual machines in Amazon data centers, VMware is concerned fewer people will buy its virtualization tools. According to CRN, VMware CEO Pat Gelsinger told service partners at the company’s Partner Exchange Conference that if ‘a workload goes to Amazon, you lose, and we have lost forever.’ VMware COO Carl Eschenbach jumped on the Amazon theme, saying, ‘I look at this audience, and I look at VMware and the brand reputation we have in the enterprise, and I find it really hard to believe that we cannot collectively beat a company that sells books.'”