Amazon Web Services is a leader in public cloud in a lot of ways, one of them being cloud pricing. According to a report by RightScale released on Monday, AWS set the standard in 2013 in terms of frequency and size of cloud price reductions.
RightScale analyzed price reductions from four public cloud providers – AWS, Rackspace, Google Compute Engine, and Microsoft Windows Azure – and found that in 2013, the four public cloud providers rolled out 25 price reductions across compute, storage and networking, up from 22 price reductions in 2012.
According to RightScale, AWS announced 12 price drops in 2013, while Azure, Google and Rackspace accounted for a combined 13 reductions last year, up from 9 in 2012.
AWS focused its price reductions in compute services, which RightScale said is good for enterprises, who still allocate around 70 to 90 percent of their cloud budgets to compute. In 2013, there were twice as many price reductions on compute services compared to 2012, 10 versus 5 price reductions, respectively.
Cost is certainly a factor in cloud computing, as evidenced by cloud budget tools including RightScale’s own Cloud Analytics solution, which is integrated in its platform to help enterprise users with multiple clouds stay in budget. But aside from cost, security is also a concern for enterprises adopting cloud services. A recent report commissioned by Microsoft showed that 60 percent of customers would pay their hosting service provider a 26 percent premium on average for security guarantees.
Cloud storage accounted for 6 price reductions in 2013, down from 8 in 2012. The average size of the cloud storage price decrease was 32 percent in 2013, compared to 20 percent in 2012. Earlier in March, Google lowered the price of its Google Drive cloud storage service, most notably offering 1TB of Drive storage for $9.99, down from $49.99 per month.
RightScale expects the price wars in the cloud to continue in 2014 with AWS setting the trend, but how low they will go remains to be seen. RightScale has gone into more detail in its Cloud Pricing Trends White Paper, which is available for download on its website.