Amazon 'not interested in price matching everybody' in the cloud

Web king says it won't always keep pace or beat Google, but will keep lowering prices


Google, Microsoft, and Amazon are battling each other on cloud computing prices, but Amazon has said it will not match Google's new low, low prices.

This is significant because on Tuesday Google dramatically dropped the prices of its mainstay storage and compute services to far below those of Amazon. Then on Wednesday Amazon responded in kind, but its cuts did not go as far as Google's.

This afternoon, US West Coast time, an Amazon executive told El Reg that the online bazaar's lucrative cloud division will try to keep prices low but won't peg itself to any particular competitor, even if they happen to be cheaper.

"We're not interested in quote unquote price matching everybody," said Amazon Web Services's veep of marketing, sales, and product management, Adam Selipsky in a chat with your correspondent.

"There will be some days where we've just lowered price and are a little bit lower than some competitor and some days where a competitor is lower than us."

This compares with Microsoft, which pegged the prices of its basic Microsoft Azure (previously: Windows Azure) services to Amazon's price list.

The decision also shows just how much can change in seven years, or thereabouts: Amazon's chief technology officer told this publication back in April 2007 that Amazon was a model of "utility computing". Utility markets, readers may be aware, are meant to deal in basic resources that have a predictable, homogenized price.

Amazon's cloud wing has thus signaled its evolution from being a lowest-common-denominator purveyor of rentable compute and storage resources, to a larger firm with ambitions to be in the enterprise.

As any sysadmin working for a large firm knows, there are other deciding factors besides price when bringing in a new technology. Amazon is wagering that its expansive set of services will help it attract big biz clients, even if Google is cheaper.

For this reason, Selipsky indicated Amazon was unlikely to pursue Google's "sustained use" pricing model, which gives developers a discount at the end of every billing cycle if they have a high utilization of their server. Amazon's product in this space is "reserved instances" which instead charges an upfront fee for a long-term discount.

"For every customer that wants a single simple price there is another customer that wants a specific targeted SKU to accomplish their particular computing job," Selipsky said. "For every customer who wants the flexibility to run what they want and when they want it and change it on a moments notice there is someone who wants a highly predictable, highly knowable cost."

All this may be true, but as the success of second-tier clouds like low-cost Digital Ocean shows, people do pay attention to price, and unlike Digital Ocean right now, Google has the resources necessary to build as large a set of products as Amazon and sell them at, potentially, a lower sticker price.

Competition seems to be working for us punters, for a change. ®


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