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Amazon announced recently a price reduction
on the EC2 instances prices. The price reduction does not include
storage or traffic so you may expect that effective cost reduction
numbers will be half on your monthly bill.
On Demand Pricing Effects
Minor price reduction for the on demand instances: 5% on small instances, 10% on larger instances. Price Reduction Target: Traditional hosting offers.
Reserved Instances Pricing Effects
Major price reduction on the reserved instances: 20% effective reduction. Price Reduction Target: Traditional hosting offers.
offers volume discounts. The volume discounts are focused on large
accounts that spent at least $1M annually at AWS services. The volume
discount are focused on the the reserved instances (the equivalent of
traditional hosting). You can expect 10% reduction (5% off bill's bottom
line) for $250K upfront bill ($1M annual AWS bill) and 20% reduction
(10% of bill's bottom line) for $2M upfront bill ($8M annual AWS bill). Price Reduction Target: Traditional hosting offers.
Linux or Windows?
The price reduction increases the price differences between Windows based instances and Linux based. Price Reduction Target: Avoid price wars with Microsoft.
Why Amazon Made These Changes?
reduction signals that Amazon has a larger price pressure from Linux
cloud providers rather than from Microsoft. It also signals that
traditional hosting providers offers focus on large customers and larger
servers accounts. These price reductions will help Amazon reduce larger
customers migration out of its services.
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