Dropping Prices Again-- EC2, RDS, EMR and ElastiCache

http://aws.typepad.com/aws/2012/03/dropping-prices-again-ec2-rds-emr-and-elasticache.html

by jeffbarr • 14 years ago

192 71 14 years ago

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nikcub• 14 years ago

Does anybody have a history of AWS price decreases?

I have seen a lot of startup internal docs where they compare the costs of AWS with colo, other cloud etc. and not one of them took into account the discounts that Amazon applies. Chances are that over 3-5 years you will see a number of price discounts - one of the only providers that does this for existing purchased infrastructure, keeping your costs in line with savings from Moore's law rather than locking in for years.

I would like to know the complete discount history because there would be enough data points now to project estimated discounts forward

rdl5• 14 years ago

If you rent servers or buy colo from anyone else, you can ALWAYS renegotiate all prices based on a new level (if you've got a cage and want to expand to a floor, it becomes a negotiating point; you don't get stuck paying the higher price on that cage and a lower price on the floor.

Until very recently, the only Amazon discounts I've ever heard of were the Reserved Instances (which really only makes sense once you're familiar with your needs). Inability to negotiate pricing is one of the main reasons a lot of consultants still go with non-Amazon options -- the client sees the list pricing for EC2 and knows what markup you're applying, vs. another option (or your own cage/suite/floor/facility) where you can consolidate all the charges.

saurik3• 14 years ago

In case anyone believes this comment (that "until recently" there have even no price drops), I will throw in an alternative anecdote (as I'm at a restaurant and am not interested anyway in digging up alternative evidence: readers can do that themselves), Amazon has decreased their prices for all kinds of things many times; bandwidth quite often, servers a few times... I actually find myself misquoting Amazon's prices in conversations often due to having lost track of random price drops.

The one thing that hasn't dropped is where 99% of my costs are: the price of a PUT to S3.

justincormack• 14 years ago

If consultants can't do business by adding a line item for their costs and have to mark up what you buy then don't hire them.

ntoshev2• 14 years ago

I don't think there were price decreases of the hourly prices for EC2 instances - previous decreases were for traffic, or introducing reserved instances where you get lower price in exchange for commitment.

I think trying to factor in future price decreases in an ec2 cost model doesn't make sense - it is too little and unpredictable to worry about. Don't forget that if you reserve an instance for 3 years and Amazon drops prices, you'd get only partial savings on the hourly fraction of the cost. Even as I use Amazon for hosting (instances running full time) I stay away from the 3 yrs reserved instances because I want to be able to reevaluate my options more frequently.

saurik3• 14 years ago

They definitely dropped hourly instance prices. They started at $0.10/hr for a small instance.

Uchikoma2• 14 years ago

But did those "internal docs" take the increasing power of colo machines (or rent) into account? The colo you buy next year probably is more powerful than the one this year. If you take AWS price decreases into account, you'd need to take increasing power (and decreasing prices) for colo into account.

Hetzner where I have servers increases the machine power (and sometimes decreases prices) every year.

http://www.hetzner.de/hosting/produktmatrix/rootserver-produ...

wavephorm• 14 years ago

I'm anxiously waiting for that moment where cloud storage becomes cheaper than buying a hard drive. Only at that point will consider I going all-cloud.

ntoshev2• 14 years ago

Google Docs storage is $0.25 / GB * year. A random 1TB drive on Newegg was $0.17 / GB. Depending on you utilization and amortization schedule, it may be worth it.

nknight• 14 years ago

$170? That's a damned expensive 1TB HDD. Most are under $130, and that's still inflated due to Thailand.

Also, 1TB hasn't been the sweet spot for a while. 2TB drives are coming in under $140 now, $0.07/GB.

sliverstorm• 14 years ago

I'm waiting for the moment where a cloud machine with extremely modest specs and traffic becomes as cheap as running a junkyard PC from my basement.

Junkyard PC's are always cheap, but I keep thinking with economies of scale they'd be able to carve out 64MB RAM/2GB disk/100MHz for $10-20/year.

rb2k_• 14 years ago

lowendbox.com is your friend for that kind of stuff

dinkumthinkum• 14 years ago

As a heavy EC2 user, you have got to think about the performance ramifications. EC2 EBS disks are abysmal in terms of performance.

rogerbinns2• 14 years ago

I keep wondering why Amazon doesn't fix this. The problem isn't so much the baseline performance which isn't stellar but can be designed to, but rather the massive variance in performance that arbitrarily changes moment to moment.

jules• 14 years ago

Well, it certainly won't come from minor price reductions on Amazon. A dedicated server from here [1] costs €299/month for 45TB. The same on Amazon would cost ~€3400/month for storage alone. That isn't even factoring in the fact that the dedicated server also comes with CPU and traffic which you have to pay for separately on Amazon which would make it much more expensive still. Amazon's storage is also notoriously slow. Amazon would have to reduce their prices by more than a factor of 10 before they come even close.

[1] http://www.hetzner.de/en/hosting/produkte_rootserver/xs29

ef42• 14 years ago

So long as the cloud-storage provider also needs to buy hard drives, that day will probably never come.

Even if the provider can get better discounts buying in bulk (which won't be very much, storage is a commodity with thin margins), he's paying for a lot more than just the storage hardware.

staunch• 14 years ago

Must be kind of funny to look at their accounting reports.

"Thanks everyone for your hard work this week. We're making substantially less money than last week. Let's keep it up people!"

GigabyteCoin• 14 years ago

AWS would be making no money if they cost more than everybody else.

jurre2• 14 years ago

You can either sell one can of soda for $5 profit or you can sell ten for $1 profit.

batista• 14 years ago

Or you can sell 1 for $1 profit, and lose $4 dollars over one sell at $5.

Lower prices != more volume guaranteed, you have to find an equilibrium.

Duff2• 14 years ago

AWS is a shared service, so as they add more customers, the overhead costs of administering the service continue to drop. Their priority is to keep growth going at a steady clip.

AWS is also a very granular service, so Amazon gets near real-time metrics re: usage, demand, etc for a variety of services. That allows them to analyze changes in usage patterns and correlate price signals to actual consumption of services.

My guess is they adjust their pricing to control growth. Too cheap, and demand will spike, requiring Amazon to grow the environment too quickly. Too expensive, and they'll have trouble making the continuous capital investments that they need to make while still making money!

Drbble2• 14 years ago

EC2 pricing was so absurd that everyone was using spot pricing for 50-80% off. This adjustment just gets more people back on the standard pricing scheme and makes tracking financial easier for Amazon.

zepolen• 14 years ago

Most dedicated hosting solutions offer some bandwidth in their pricing and not a trivial amount either. 3TB a month is not uncommon which would cost an extra $350 a month on Amazon. If they want to compete vs dedicated hosts and it seems they are with all these price drops and reserved instances, they should take that into account, because right now they are just way too expensive.

webjunkie• 14 years ago

We actually get 10 TB included... :)

Uchikoma2• 14 years ago

Hetzner also has 10TB per month.

RKearney• 14 years ago

You get 100TB at 100tb.com... :)

dazzla2• 14 years ago

Amazon would only cost you an extra $350/month if you actually use that 3TB.

guynamedloren• 14 years ago

Slightly off topic, but...

I launched a little web app about a year ago to play around with AWS and to take advantage of a free trial. It has grown organically with absolutely no marketing and even got covered by Lifehacker. It's a filesharing app for groups and is used heavily by the education sector.

My free trial period expired a few months ago and I don't know if I can justify supporting the app. I've put it maybe 10 minutes of work since I launched it a year ago, and have not yet attempted to monetize. Anybody interested in taking this off my hands? Cash or something else? I'm open to ideas.

nl2• 14 years ago

How much traffic?

You could try selling it on flippa.com

itmag• 14 years ago

Off-topic but relevant: does anyone have a good up-to-date tutorial on how to get started with cloud computing? Ie different alternatives, and pros/cons of each. And some info on how to get started doing common tasks.

olalonde• 14 years ago

Cloud computing could mean a lot of things but there was recently an article on HN that did a pretty good job at describing the different types of hosting: http://blog.pinboard.in/2012/01/the_five_stages_of_hosting/

eddy_chan• 14 years ago

I wrote a basic primer for django on EC2 to take advantage of the free tier last week here: http://eddychan.com/post/18484749431/minimum-viable-ops-depl...

mixmastamyk• 14 years ago

Thanks, I'll need this in a few weeks.

bcbrown• 14 years ago

https://www.coursera.org/saas/class/index might be worth looking into.

marbletiles2• 14 years ago

Not dropping the hourly rate for existing reserved instances leaves me feeling very short-changed.

epi0Bauqu• 14 years ago

Yes, I feel like an idiot now for just buying a bunch of reserved instances. By my calculations if you just bought a reserved instance you'd actually save money by rebuying it if you plan to run it heavily over the three year period!

cperciva• 14 years ago

I've been holding off on buying reserved instances because it looked like they were overdue for a price cut. Even now I'm not sure if I should go ahead and buy -- sure, I'd save money compared to the current on-demand instance prices, but is the 2012 reserved pricing cheaper than the 2014 on-demand pricing will be?

I really hope Amazon adds more transparency into the pricing so I can stop worrying about things like this.

dazzla2• 14 years ago

I think your in luck. Looks like your existing reserved instances will see the savings as well.

"This customer was in the process of switching to 3-year Heavy Utilization Reserved Instances (seeing most of their instances are running steady state) for a whopping savings of 55%. Now, with the new EC2 price drop we're announcing today, this customer will save another 37% on these Reserved Instances."

marbletiles2• 14 years ago

I think that was carefully worded - note the "in the process of switching". The email sent to existing owners this morning says the new pricing will only apply to reserved instances purchased since March 6.

ef42• 14 years ago

Came here to say the same thing. I sent an annoyed message to customer service. It can't hurt, maybe they'll get enough complaints to change their minds.

vilda• 14 years ago

It's fair to mention that maintenance of your infrastructure on AWS is far from negligible. This is not unique for private clouds.

Especially given certain unpredictability in instance and EBS performance.

Drbble2• 14 years ago

EBS is like the Matrix part III and Star Wars Episode I... It is best if you ignore the rumors that it exists.

johnlauck• 14 years ago

If only mobile phone service providers followed the same path...

verelo3• 14 years ago

So i could just be dumb, but there is something about this pricing that doesn't make sense to me. All of this is based on micros in the Virginia region, and having them for 12 months.

On demand for 12 months: $170 = (0.02 24 * 365)

Spot instance for 12 months: $52.56 = (0.006 24 * 365)

Light utilization - reserved for 1 year: $128 = (($0.012 24 * 365) + $23)

Medium utilization - reserved for 1 year: $115.32 = (($0.007 24 * 365) + $54)

Heavy utilization - reserved for 1 year: $105.80 = (($0.005 24 * 365) + $54)

I get that the spot instance price may change, but it would likely always be lower than on demand and given that the others prices change, are they just the best option?

So...maybe the marketing words are getting me confused, but i thought that heavy would be more expensive? Or is this telling me that i'm located with other heavy users, therefore i'm getting less and i pay less?

Today we use a lot of micros, i'm starting to realize how much we could save if we switch...however whats a "better server" a heavy or a light?

Judson2• 14 years ago

From Amazon:

Light Utilization:

"Light Utilization RIs offer the lowest upfront payment of all of the Reserved Instance types. Along with this low upfront payment, you’ll receive a significantly discounted hourly usage fee. Light Utilization RIs allow you to turn off your instance at any point and not pay the hourly fee."

Medium Utilization:

"Medium Utilization RIs are the exact same Reserved Instances that EC2 has offered for the last several years. They have a higher upfront payment than Light Utilization RIs, but a much lower hourly usage fee. Medium Utilization RIs allow you to turn off your instance at any point and not pay the hourly fee."

Heavy Utilization:

"With this RI, you pay a little higher upfront payment than Medium Utilization RIs, a significantly lower hourly usage fee, and you’re charged that lower hourly rate for every hour in the Reserved Instance term you purchase."

Source: http://aws.amazon.com/ec2/reserved-instances/

verelo3• 14 years ago

Yeah i get the pricing of light and heavy etc....but it doesnt actually state if they are different in performance or if its just a pricing thing?

If its just a pricing thing, the difference between $23 - $54 to add an extra $15 / savings over a year seems reasonable to me...but if there was a performance hit i'd think again.

akh• 14 years ago

We're almost done updating over 2,000 prices from AWS clouds: http://blog.shopforcloud.com/2012/03/were-updating-over-2000...

You might prefer to use ShopForCloud.com to get cost estimates rather than use Excel spreadsheets. They have a lot prices to update, for example, EC2 has 7 clouds x 13 types of instances x at least 3 OS choices (Linux, Windows, Windows with SQL Server) x at least 4 purchase options (on-demand, light/medium/heavy-utilization reserved) => 1,092 individual prices! Just goes to show that they have pretty complicated pricing schemes.

Dropping Prices Again-- EC2, RDS, EMR and ElastiCache

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