Amazon Web Services cuts S3 prices, knocks old guard rivals

"We're lowering prices for S3 by 24 percent to 27 percent in all regions," said Andy Jassy, senior vice president of Amazon Web Services. Jassy also mocked old guard technology rivals, which were seen as cloud washers.
Written by Larry Dignan, Contributor

Amazon Web Services will cut S3 prices by roughly 24 percent to 27 percent across all regions in a move that illustrates the cloud provider's ability to add economies of scale to its IT infrastructure.


"We're lowering prices for S3 by 24 percent to 27 percent in all regions," said Andy Jassy, senior vice president of Amazon Web Services.

The price cuts are one data point highlighting how AWS intends to disrupt "old guard technology companies."

Jassy made the comments at Amazon Web Services' inaugural re:Invent conference in Las Vegas. The powwow was designed to bring together developers and customers to talk cloud migration and other key topics.

During his keynote, Jassy outlined the company's sheer cloud computing infrastructure bulk, customer base and ecosystem. The message is relatively simple: AWS has a dominant lead over what's becoming a long list of rivals. One data point: Netflix intends to completely run on AWS in the months to come. 

Also: Amazon Web Services launches Redshift, datawarehousing as a service

Jassy gave the following healthcheck on the AWS business, which remains a mystery in Amazon's financial results since it's 10 percent or more of the e-commerce giant's business yet. Among the key stats:

  • AWS has hundreds of thousands of customers in 190 countries;
  • 300 government agencies and 1,500 educational institutions;
  • Jassy also touted AWS' ecosystem of integrators to software vendors to marketplace partners; 
  • There are 1.3 trillion total objects on S3;
  • AWS runs more than 835,000 requests per second; 
  • Has 3.7 million clusters; 
  • In 2012, AWS will launch 158 new services and features, up from 81 in 2011.
  • And AWS in 2012 now adds enough server capacity to power a $5 billion global enterprise daily.

In total, 6,000 people were attending re:Invent. Jassy noted that the conference wasn't about marketing, but education and cloud knowledge. "We have a virtuous cycle the more customers we get," said Jassy, referring to AWS ability to lower costs as it adds economies of scale and cuts prices. "We're able to spin that flywheel faster," he added. "We've lowered prices 23 times since 2006."

However, it's was hard to overlook the key message with AWS. AWS has a head start on rivals ranging from HP to Oracle to Google. Every cloud player is coming after AWS. The challenge for Amazon's rivals is that AWS is more mature and serves as the basis of multiple enterprises IT infrastructure.

Jassy said:

The old guard technology companies are taking their products and affixing the word cloud to them. You have to be careful of who is telling you what. They are cloud washers. The economics of what we are doing are disruptive to the old guard technology companies.

Jassy mocked cloud quotes from Oracle, IBM and HP by taking parts of their logos without mentioning them by name.

To counter the cloud washers, AWS' conference is designed to beat you over the head with the customer base.

  • NASA/JPL CTO Tom Soderstrom outlined the Mars Curiosity rover project and how AWS was used to deliver video around the world.
  • Hastings documented how the company uses AWS. Hastings noted the competition between to Amazon and Netflix doesn't affect the AWS relationship. 
  • Execs from Johnson & Johnson, The Hartford, Pfizer and others are walking through their AWS implementations.

The cloud battle will be interesting. AWS seemed to be much more comfortable with taking on the likes of Oracle, IBM and HP and their cloud efforts.

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