Pricing war in cloud space



There’s so much competition in the cloud industry that cloud companies keep cutting their prices, even while they increase their storage limits. There’s a couple of reasons for this. For one, computer storage keeps getting cheaper. A gigabyte’s worth of storage on a hard drive in 1993 cost over $US9,000, but it cost a mere 4 cents in 2013.

But you can really thank Amazon for making sure that cloud computing companies pass those savings along to customers. As its costs drop, Amazon cuts its prices for its cloud. Amazon Web Service had 44 price cuts in about the last six years, it says, thanks to a culture of “frugality.”

Amazon is increasing revenue by gaining more customers and adding ever more services for which they are willing to pay, even though they will pay less for each as time goes on.

They’re treating computer services like their retail store. You’re likely to stock up your cart with more stuff if you’re getting a bargain on every item you buy.

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November 12, 2014

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