Amazon Web Services has entered the virtual desktop infrastructure (VDI) market with Amazon WorkSpaces.

Amazon Unveils AWS Price Cuts, Launches Desktop WorkSpaces

A day after a shot across the bow from Google, it was Amazon’s chance to unveil new features and pricing in the cloud wars. At the AWS Summit in San Francisco, Amazon announced new Instance families and the general availability of its virtual desktop offering, Amazon WorkSpaces. And, what a lot of people were waiting for, AWS responded to Google’s price cuts by slashing its prices as well.

The biggest difference between Amazon and Google’s cloud presentations was the intended audience. Google targeted the tech savvy, while Amazon chose to cover, well, basically everyone. The company threw out so many customer examples that you could write a Russian novel-length rundown of who’s using AWS.

AWS Slashes Prices

Amazon has lowered pricing 41 times since its inception. The 42nd reduction was a big one. “We take our large scale and pass that to customers,” said keynote speaker Andy Jassy, Senior Vice President at Amazon. S3 is dropping its pricing by 51 percent on average, while Elastic Compute Cloud (EC2) is lowering prices by about 10 to 38 percent, depending on the instance family. Amazon also announced price drops of 28 percent for its relational database service, and 27 to 61 percent for its Elastic Mapreduce caching service.

“Lowering prices is not new for us,” said Jassy. “It’s something we do on a regular basis. Whenever we can remove cost in our cost structure, we pass it on. You can expect us to continuously do this.”

Pricing charts aren’t sexy, but the main takeaway is that the cloud providers with the most scale are aggressively cutting prices, as we saw with Google yesterday. The raw building blocks of computing are becoming commoditized. The key will be adding value atop of these compute resources. Amazon does this through the sheer number of services it offers, as well as the richest ecosystem of applications and developers in the cloud world.

Commoditization is a much maligned thing: the materials for building a house are all commodities, but it doesn’t mean I’ll buy the raw materials and build the house myself to save money. Price cuts shouldn’t be the main consideration, which is why both Google and Amazon didn’t lead with their pricing.

Amazon’s price cuts are equally as aggressive as Google’s. Having lived through the hosting pricing wars of the 2000s, we’re seeing the same thing happening now with cloud pricing. However, the race isn’t only to the bottom of pricing, it’s to the top of features. And Amazon has a big head start, plus the biggest ecosystem out there to build out a lot of features.

WorkSpaces Enters General Availability

WorkSpaces is Amazon’s Virtual cloud desktop offering. Managing desktops on premises is tricky and hard to deal with, which led to the creation of the VDI space. Most VDI solutions are expensive and put the management requirement on the end user.

“This was the request we got most frequently from companies,” said Jassy. “That’s why we launched Amazon WorkSpaces. It gives central management and security, without worrying about the hardware, infrastructure management and is half the price of other solutions.”

WorkSpaces launched in preview in November, and 10,000 customers have signed up since then. WorkSpaces is now available for everyone.

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About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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  1. Price cuts are great to spark adoption, but I think the real game will be played in operational efficiency and who delivers better service, with better margins, and can pinpoint and play on strengths to preserve margins long term. Both Google and Amazon have solid operations, so this will be fun to watch to see who drives differentiation first.