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Amazon slashes cloud prices

Amazon Web Services (AWS) has again cut prices for customers using its cloud products worldwide, and has introduced a new volume-pricing scheme for heavy users.
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Written by Luke Hopewell, Journalist on

Amazon Web Services (AWS) has again cut prices for customers using its cloud products worldwide, and has introduced a new volume-pricing scheme for heavy users.

AWS contacted customers yesterday with the good news, telling them that the prices for its EC2 cloud, Relational Database Service (RDS) and ElastiCache would be cut, in some cases by up to 37 per cent.

"We are excited to announce a reduction in Amazon EC2, Amazon RDS and Amazon ElastiCache prices. Reserved instance prices will decrease by up to 37 per cent for Amazon EC2, and by up to 42 per cent for Amazon RDS across all regions. On-demand prices for Amazon EC2, Amazon RDS and Amazon ElastiCache will drop by up to 10 per cent," the company said overnight.

AWS also introduced a new volume-discount tier for its EC2 cloud, meaning that customers who purchase a large amount of reserved instances will receive a discount.

A reserved instance sees a particular server put on hold for a period of either one or three years, making the per-hour cost cheaper for users.

Volume discounts see upfront and hourly rates slashed by up to 20 per cent based on the number of reserved instances purchased.

AWS used Foursquare on its blog as an example of the savings that can be achieved with the new volume-discount program.

[Foursquare Labs uses] AWS to perform analytics across more than 5 million daily check-ins. Foursquare runs Amazon Elastic MapReduce (EMR) clusters for their data analytics platform, using a mix of high memory and high CPU instances.

Previously, this EMR analytics cluster was running on-demand EC2 instances, but, just recently, Foursquare decided they would buy over US$1 million of one-year heavy utilisation reserved instances, reducing their costs by 35 per cent while still using some on-demand instances to provide them with the flexibility to scale up or shed instances as needed. However, the new EC2 price drop lowers their costs even further.

This price reduction will help Foursquare save another 22 per cent, and their overall EC2 reserved instance usage for their EMR cluster qualifies them for the additional 10 per cent volume tier discount on top of that. This price drop combined with the move to reserved instances will help Foursquare reduce their EC2 instance costs by over 53 per cent from last month, without sacrificing any of the scaling provided by EC2 and Elastic MapReduce.

The new volume-pricing structure applies to all reserved instances purchased after 6 March 2012.

Meanwhile, two of the world's largest cloud-computing integrators, GlobalOne and Cloud Sherpas, have merged under the name of the latter. The bulked-up Cloud Sherpas will count Google and Salesforce.com as its largest partners.

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