Cloud Price Cuts Leave Customers Confused, Annoyed: Peer 1 Report

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Half of IT decision makers in the US and even more in the UK say the price cuts of the so-called cloud price war are “not to be trusted,” “confusing,” or “annoying,” according to a survey released this week by Peer 1. While some respondents said that price cuts could motivate them to change service providers, the majority are not willing to compromise on basic service elements like security and customer service.

The study is composed of answers from 550 IT decision makers, split nearly evenly between the U.S. and UK, and echoes a persistent pushback against what is sometimes called a “race to the bottom.”

Twenty-three percent of respondents said that they are “highly” or “somewhat” likely to consider changing hosting providers as the result of a price cut. Conversely, 43 percent said that a price cut is “unlikely” or “extremely unlikely” to sway them to a new provider.

Most respondents are unwilling to accept a lower level of service in return for a lower price, with 80 percent saying they would not compromise on security for a lower price, over half unwilling to compromise on speed, and over 90 percent unwilling to compromise on customer service.

“In the age of heightened cyber threats, the boom in eCommerce and also the storing and dissemination of data by thousands of organizations, the role of hosting in many businesses has never been more important,” said Toby Owen, VP product at Peer 1. “While cheaper hosting has an appeal for some who are motivated by price, the research shows that speed, service and security are top priority for IT decision makers who are not willing to compromise on their Web hosting business.”

The results indicate that customers agree with Peak CEO Luke Norris that “price is just a weapon” and that meeting the specific service requirements of customers is more beneficial to them than a low sticker price.

Still, IaaS price cuts march on, with ProfitBricks making deep price cuts last week.


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  1. Spicoli

    Bandwidth wars 2.0