More Price Cuts from Amazon Web Services
More Price Cuts from Amazon Web Services by UCStrategies Staff
Amazon Web Services has lowered its fees for the company’s relational database service (RDS), and is carrying on with its price-cutting strategy.
There have been price cuts totalling up to 18 percent for MySQL and Oracle Bring Your Own License (BYOL), and up to 28 percent for SQL Server BYOL. The price changes were put in place at the start of this month and are different across regions.
A new rate structure was put into place on June 11, specifically for reserved instances of RDS where prices were cut by up to 27 percent for MySQL and Oracle BYOL. Usually, reserved instances are non-refundable, but the company is not following this rule for single-year reserved instances which were acquired in the last 30 days, as well as for three-year reserved instances which were acquired in the last 90 days. Customers are able to exchange purchases for new ones and receive prorated refunds following this new plan.
There have been a number of price reductions through AWS, in particular for its EC2 service, which are usually positioned due to increased efficiencies passed down to the consumer. However, some channel partners have questioned the increases, noting that they might be motivated by strategic moves which seek to make rivals lose profits as they are forced to respond with their own price cuts.
The vice president of marketing at Ashburn, Virginia-based Latisys (a managed service provider), Jonathan Sharp, noted: “I wonder if Amazon is intentionally trying to bleed its competitors a little bit. I don't know for a fact that this is their strategy, but it is possible that they are trying to make it difficult to enter the public cloud market.”
Sharp did not comment on the results of low prices for public cloud services, but stated that the issue appeared to be a race to the bottom.
He added: “I think it's a reflection of the intense competition that's out there right now. But the repeated price-cutting is not a good thing for companies like Rackspace. It's possible that Amazon is preemptively trying to make it a little bit harder for everybody else.”
Further to managed service providers, the price-cutting trend is a positive advancement which may support MSPs in gaining more headroom in terms of writing up their own deals.
The principal of Merrimack, New Hampshire-based Kilpatrick IT Solutions at LLC, Kevin Kilpatrick, stated: “I think the prices are going to get a lot more competitive, which I think can only help us as a managed service provider at the end of the day. Most of our clients do not seem to be expecting major price cuts from us, but they do expect some of the pricing to go down over time. But if our costs go down, then we can pass that along to our end-users as well.” (CY) Link