On Thursday Amazon Web Services announced that it was eliminating fees for inbound data transfer (uploads) and reducing fees for outbound data transfer (delivery). It’s the latest in a series of moves by Amazon to address customer bandwidth costs, with a competitive motive as well. Here’s a roundup of analysis and commentary from around the Web :
- All Things Distributed – From Amazon.com CTO Werner Vogels: “Today marks another important milestone in our continuous cost reduction strategy; we’ve lowered prices over a dozen times in the past four years, and today we’re lowering them again. Bandwidth pricing will see a reduction that for many customers can easily lead to a 40% or 50% savings in bandwidth costs. Incoming bandwidth cost will drop to $0.00 in every region. And, in the US and Europe every outgoing tier will see price reductions. We are also adding new tiers to pass saving onto our very large bandwidth consumers.”
- GigaOm (Derrick Harris) – There are two likely – and non-monopolistic – explanations for why a company with such a dominant market position would continually drop prices like this, and they’re interrelated. One is that the economies of scale AWS achieves via its massive operation allow it to offer lower prices on everything from computing to bandwidth.The other reason is that cloud computing democratizes access to resources. AWS knows it can’t pull the Oracle strategy of locking customers in and then bending them over a barrel, so to speak. AWS has a seemingly insurmountable innovation lead among cloud providers, but it doesn’t always have the lowest prices.
- IT News – It is not the first time Amazon has felt compelled to offer free inbound data transfers. The company killed its free inbound data offer last October and replaced it a with a free micro Linux instance that would only attract charges if the application became popular.
- ZDNet (Mary Jo Foley) - Amazon wasn’t the first cloud provider to eliminate incoming bandwidth fees, as noted by Mary Jo Foley. “Microsoft plans to tweak its Windows Azure pricing, come July 1, to make the platform more attractive to users who want to migrate lots of data to the cloud. The change, announced on June 22, also will result in all inbound data transfers for both peak and off-peak times being free, company officials said, via a post to the Windows Azure blog.”