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Amazon Cuts Prices Again

Amazon Web Services has lowered the pricing on two types of relational database service and on ElastiCache, its data-caching service.

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Amazon's 7 Cloud Advantages: Hype Vs. Reality
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Amazon Web Services has lowered the price of its relational database service "by up to 14%" for on-demand usage. The reduction applies to both RDS based on open-source MySQL and to Oracle, the cloud service provider announced Wednesday. The reductions became effective Nov. 1.

Prices were not lowered for SQL Server, another relational system offered by cloud competitor Microsoft, whose Windows Azure service is starting to compete more directly with AWS.

A second Amazon service, Amazon ElastiCache, data caching for database applications, was reduced up to 16% for on-demand usage. The reductions apply to the services in both northern Virginia and Amazon's West Coast facility in Oregon. Amazon prices usually vary slightly by region, based on the cost of production in that region.

[ Want to learn more about Amazon's long-term plans to cut prices? See Amazon Brings Price Cutter Mentality To AWS. ]

The move is another in a series of ongoing spot reductions that Amazon has implemented over the last three years. In February, it lowered S3 storage prices by 11% to 13.5%.

The database service cuts apply to M1 database instance classes. M1 is not a size but designation of first-generation cloud database instances, which come in micro, small, medium, large and extra-large sizes. Both medium and extra-large are new sizes, added to the Amazon catalogue with this announcement.

After the price reductions, it charges $.025 per hour for a micro instance of MySQL. It charges $.09 for small; $.18 for medium; $.365 for large and $.73 for extra-large instances. Database service prices are the same in the northern Virginia and Oregon data centers.

ElastiCache is an add-on to the database service that allows users to put their data in memory, consistent with the use of open-source Memcached, where it can be retrieved by the database much faster than from disk.

Amazon's VP of product management Adam Selipsky said in a February interview with InformationWeek that, "Prices of all cloud services will go down over time. A lot of technology business is a good business with high margins. But that's not Amazon's strategy. We've lowered prices 18 times over six years. Amazon's approach reflects its roots in the business of retail."

Critics, such as the head of InformationWeek's reports service Art Wittmann, point out that the cost of replenishing Amazon's core compute infrastructure goes down at a rate that reflects Moore's Law, or is cut in half every 18 months. There are, of course, the added costs of doing business as a cloud provider -- offering infrastructure as a remote, integrated system, and offering that service on an on-demand basis.

For an additional discussion of cloud pricing, see InformationWeek's series on cloud comparison shopping.

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John Foley
John Foley,
User Rank: Apprentice
11/9/2012 | 7:35:53 PM
re: Amazon Cuts Prices Again
I've long felt that Amazon's cloud pricing options are highly innovative. To be able to order a micro instance of a virtual database for 2.5 cents is pretty cool. But these aren't deep cuts ("up to 14%"), and careful cost analysis must be done before you know for sure if Amazon's cloud is cheaper than do-it-yourself IT systems. For more, see my column, "Expect To Save Millions In The Cloud? Prove it."
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