Amazon lowering storage costs

For the past few months I’ve been debating with other OfficeDropStars why the heck Amazon hasn’t ever lowered cloud storage costs. Well, looks like they are finally bringing them down! The first tier of storage pricing is coming down from $0.14 per GB/mo to $0.125. The lower tiers are seeing about 12% reductions in prices – but the biggest tiers have no stated decrease (i.e. they are staying constant!)

It’s a little odd the top tiers aren’t going down. I guess this is because those rates are more likely negotiated with the company using them, where as the lower rates are pretty much just plain old taken by the company using it?

Why is Amazon lowering storage costs?

What’s motivating the lower storage costs? Are other cloud storage companies starting to eat at their new business? I kind of doubt that it’s MSFT’s platform, I don’t know any startups using it. Perhaps Amazon sees Apple’s iCloud starting to take some of the newest startup storage needs, where the startup simply pushes the costs of cloud storage onto the end user by integrating their apps with iCloud and letting the user deal with it? Think about it – Amazon has basically been in the cloud storage business since 2007 and I don’t think prices have come down before! And cloud compute costs for sure haven’t!

Comparison of New and Old Storage Costs

These are the numbers I got from Amazon, and are current as of Feb 7 2012.

Amazon Storage Tier Old Pricing/mo New Pricing/mo
1st 1 TB $0.140 $0.125
Next 49 TB $0.125 $0.110
Next 450 TB $0.110 $0.095
Next 500 TB $0.095 $0.090
Next 4000 TB $0.080 $0.080
Over 5000 TB $0.055 $0.055

The lower prices are effective as of Feb 1 and are listed here.

Author: Healy Jones

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