Amazon is growing on-demand services after reporting a 20% sales increase in 2015.
Amazon says prices for its web-based services will drop as much as 42%.
Amazon.com Inc.’s Web Services division announced yesterday that it is lowering the prices of its various web-hosted services anywhere from about 10% to 42%.
The price reductions apply to the company’s Amazon Elastic Compute Cloud (EC2), Amazon Relational Database Service (RDS), Amazon ElastiCache and Amazon Elastic Map Reduce services. Users of the EC2 service, which allows users to tap into Amazon’s web-hosted servers for computing power and charges by the hour or on a contract basis, will see their rates drop depending on use and region, Amazon says. On-demand users, those who pay by the hour, will see prices drop up to 10%. Clients that use more will save more, Amazon says. Users who contract with Amazon for computing power for a set period of time, such as a one or three-year term, may see their prices drop as much as 37%, for example.
Seven retailers in the Internet Retailer Top 500 Guide and two retailers in the Second 500 Guide use Amazon to host their e-retail sites. Amazon also counts a number of vendors who provide services to e-retailers as Amazon Web Services clients.
Amazon says this is the nineteenth time it has lowered the cost of Amazon Web Services products in the six years. Amazon, in a blog post, says it is passing the savings it has carved out of its own costs on to customers in the form of lower prices.
“Some companies work hard to lower their costs so they can pocket more margin. That’s a strategy that a lot of the traditional technology companies have employed for years, and it’s a reasonable business model. It’s just not ours,” Amazon says. “We want customers of all sizes, from start-ups to enterprises to government agencies, to be able to use AWS to lower their technology infrastructure.”