Amazon AWS 19th Price Reduction – a Closer Look

If you have been following me regularly then you would know that I maintain that charges for cloud services are not coming down in proportion to the routine reduction of hardware cost. So, let us examine in Amazon has reversed the trend with its latest announcement of price reduction. On 6th March, 2012 Amazon announced:

“…a reduction in Amazon EC2, Amazon RDS, and Amazon ElastiCache prices. Reserved Instance prices will decrease by up to 37% for Amazon EC2 and by up to 42% for Amazon RDS across all regions. On-Demand prices for Amazon EC2, Amazon RDS, and Amazon ElastiCache will drop by up to 10%. We are also introducing volume discount tiers for Amazon EC2, so customers who purchase a large number of Reserved Instances will benefit from additional discounts. Today’s price drop represents the 19th price drop for AWS**, and we are delighted to continue to pass along savings to you as we innovate and drive down our costs…”

**since the launch of the service – (my addition)

How much of this (37%, 42%, 19th etc.) is sales talk and how much of it is reality? Let me just present the data that I have collected.

Have a look at the data you be the judge.

[Update: Why am I not surprised that Google drops the price of Cloud Storage service within a week?]

[Update: This was going to happen and it has happened within 10 days! Microsoft Trying Hard to Match AWS, Cuts Azure Pricing]

How does the current price compare with what existed in January, 2010

I had taken a dipstick of the prevailing AWS prices on Jan-10 which you can check here. There is no doubt that the breadth and the depth of offering has increased significantly, but we can still compare the price of those offering which existed then.

Here is a comparison between prices then and price now.

Jan-10 Mar-12
On-Demand Instances Small – Linux – N. Virginia $0.085 $0.080
Quadruple Extra Large – Windows – N. California $3.160 $2.504
Data Transfer – In Free till June 2010 Free
Data Transfer – Out Per GB depending on the total monthly volume $0.1 to $0.17 $0.05 to $0.12
Storage (EBS) Per allocated GB per month $0.10 $0.10
I/O Requests Per million I/O $0.10 $0.10

Price Reduction in last 3 years

I could locate 12 instances of price reduction announcement in last 3 years. Except for the current announcement all other have lowered price on only one element of AWS. Here is the summary:

  • On-demand instance: 2 Times (Mar-12 & Oct-09)
  • Reserved Instances: 2 Times (Mar-12 & Augt-09)
  • Storage: 3 Times (Mar-12, Feb-11 & May-10)
  • Data Transfer: 2 Times (Jul-11 & Feb-10)
  • Cloud Front: 2 Times (Jul-11 & Jun-10)
  • Cloud Watch: 1 Time (May-11)
  • Premium Support: 1 Time (Jan-11)

Here is the full list:

New, lower pricing for Amazon EC2, RDS, and ElastiCache Mar-12 Reduction in Amazon EC2, Amazon RDS, and Amazon ElastiCache prices. Reserved Instance prices will decrease by up to 37% for Amazon EC2 and by up to 42% for Amazon RDS across all regions. On-Demand prices for Amazon EC2, Amazon RDS, and Amazon ElastiCache will drop by up to 10% All
New Lower Pricing Tiers for Amazon CloudFront Jul-11 Lowered prices for Amazon CloudFront — we’ve added new usage tiers in every region, and in the US and Europe we’ve reduced data transfer pricing in every existing tier Cloud Front
AWS Lowers Data Transfer Costs – Effective May 1 Jul-11 We will no longer charge a separate fee for internet data transfer in. For internet data transfer out, in the US and Europe we’ve reduced the price at every existing usage tier and in all regions Data Transfer
Amazon CloudWatch Announces Custom Metrics, Lower Prices for Amazon EC2 Monitoring May-11 We are lowering the price of existing Detailed Monitoring for Amazon EC2 instances by 68% to $3.50 per instance per month Cloud Watch
Amazon S3 announces new lower prices for standard storage Feb-11 All Amazon S3 standard storage customers will see a reduction in their storage costs. For instance, if you store 50 TB of data on average, you’ll see a 12% reduction in costs, and if you store 500 TB of data on average, you’ll see a 13.5% reduction in costs Storage
AWS Introduces New Premium Support Plans, Lowers Usage Prices by 50% on Existing Plans Jan-11 Usage pricing on existing Premium Support Gold and Silver offerings by 50% Premium Support
Amazon CloudFront Adds HTTPS Support, Lowers Prices, Opens NYC Edge Location Jun-10 Reduced our pricing for regular HTTP requests by 25%: prices for HTTP requests now start at $0.0075 per 10,000 requests Cloud Front
New Lower Prices for High Memory Double and Quadruple XL Instances May-10 Lowered the On-Demand and Reserved prices for High Memory Double Extra Large (m2.2xlarge) and Quadruple Extra Large (m2.4xlarge) DB Instances Storage
AWS Announces Lower Pricing for Outbound Data Transfer Feb-10 Lowering AWS pricing for outbound data transfer by $0.02 across all of our services, in all usage tiers, and in all Regions Data Transfer
Announcing Lower Amazon EC2 Instance Pricing Nov-09 Lowering prices up to 15% for all On-Demand instance families and sizes On-Demand Instances
New Lower Price for Windows Instances with Authentication Services Oct-09 Removed the distinction between Amazon EC2 running Windows and Amazon EC2 running Windows with Authentication Services On-Demand Instances
New Lower Prices for Amazon EC2 Reserved Instances Aug-09 Lowered the one-time fee for all Amazon EC2 Reserved Instances by 30% Reserved Instances

Amazon AWS pricing details

Here is a Snapshot of the pricing as it exists now (March, 2012)

I will be able to use this in future for comparison!

8 Responses to “Amazon AWS 19th Price Reduction – a Closer Look”
  1. reko says:

    Really a great analysis! I general I think that importance bigger drop in reserved instances was not emphasized by AWS and most authors. At it may mean additional savings for many – see this post:

  2. Great article .. though how can you actually control your cost efficiency with all of these details ? We are a new small start-up that aim to help cutting to trough the fog of cloud. I invite you to check our costs test drive app at

    VP @

  3. niall says:

    If you are going to do a comparison then you should also include a comparison of price reductions for reserved instances and not just the on-demand ones.

    The reserved instances have some significant price drops e.g. hourly cost of a 3 year reserved small windows instance reduced by 33%.

    • Udayan Banerjee says:

      I agree with you but unfortunately I had not kept a record of the prevailing reserve instance price as it existed on January, 2010

Check out what others are saying...
  1. […] Here is a more detailed analysis on past price reduction. […]

  2. […] AWS offerings. This is the 19th consecutive price reduction they’ve made in 6 years.  (see: here […]

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