Bert Hochfeld takes another look at Amazon’s AWS in his latest article and, among other things, wonders whether AWS and Microsoft are about to engage in a price war over cloud pricing:
In an excellent article that appeared on this site a few days ago, contributor Joseph Mwangi wrote about a series of price cuts that Microsoft (NASDAQ:MSFT) Azure had announced in some segments of its product line. I might, however, have turned the title around and asked if Microsoft can afford to have a price war with Amazon. And I would have concluded it cannot, and logic says it will not choose to go there.
Mr. Mwangi surmised that the price cuts were in response to AWS announcing that it was to open another of its regions in France a few weeks ago. I do not think the two items are particularly related. The entire business ethos of AWS is built on growing more rapidly than the market, and opening regions is one of the things it does. The company has announced plans to open multiple regions. A couple of months earlier, AWS opened its Mumbai, India, region. Other new regions coming soon include London, Montreal, Ohio and Ningxia, a large city in China…
In addition to the new regions, the company will open 13 new “availability zones” on top of the 35 it has been operating. Amazon’s architecture is built on having multiple zones and regions which allow users to experience optimal availability, fault tolerance and scalability when compared to the performance possible from a single data center.
There are, to be sure, commentators on some of my earlier articles who have suggested that there are other ways to achieve the same results without building multiple data centers, but it is considered by most industry observers to be the appropriate strategy to follow in order to grow the availability of the network for an ever-increasing user population. I don’t know, to be sure, but I doubt that Microsoft lowered some of its prices to respond to Amazon’s planned region in Paris - I do think it is just part of the business as a whole. But the question of a price war in the space is not one to be dismissed casually, even if the opening of any particular data center is unlikely to be a precipitating factor.
Hochfeld also discusses the competing cloud services being offered by Google and Oracle, so be sure to read the whole thing at http://seekingalpha.com/article/4012037-amazon-web-services-…
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