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AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

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Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#31

Post by nilsbunger »

evan_ wrote: post #5

I'm surprised this is being cast as Amazon responding to Google's price cuts- the AWS conference was scheduled months in advance so if anything Google heard about the price cuts and announced their own just ahead of the conference as a (successful; apparently) attempt to take the wind out of Amazon's announcement. Interesting that they dropped by the same amount; either it was a lucky guess, Amazon adjusted their adj…

If I were amazon, I would've prepared to do a price cut when Google announces one. Then when they announce it, just push the button. Why give up margin earlier than necessary? *

Of course waiting to do a price cut till their competitor does leaves a bad taste in some customers' mouths. But I bet they think they're far enough ahead that it doesn't matter. Would Netflix and similar big AWS customers really leave AWS over something like this?

* This strategy even has a name: "follow the follower". Very common strategy in sailing.

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#32

Post by akh »

bdicasa wrote: post #7
bowlofpetunias wrote: post #6

I keep expecting Amazon to change their reserved instance policy. Who's going to commit to reserved instances during an ongoing price-war? Amazon themselves proudly announce it as their 42nd price drop. That's not really a strong selling point for long term contracts.

Kind of frustrating, really. I just bought 2 reserved instances about 6 weeks ago. Would have saved a nice penny if I waited. It's definitely nice to see the pricing become more affordable over time though. Before this cut I really struggled going with AWS, but wouldn't even need to think about choosing them after this reduction.

Contact AWS Support, I saw a case of this where a user bought RIs a few days ago and they offered a refund for the RIs, at which point they can decide to buy it again using the new lower price or just stick with on-demand.

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#33

Post by awj »

mcintyre1994 wrote: post #28
awj wrote: post #26

Earlier quoted context omitted.

So your version of Occam's Razor is "Amazon hurriedly cut prices on a profitable service without much time for evaluation" over "someone at Amazon told Google about upcoming price changes while Google had time to decide they could jump in early on it". I'm not saying that either interpretation is wrong , but I think your use of Occam's Razor here says more about your assumptions than the nature of things.

Could it be that Amazon had a less significant price drop planned, Google announced theirs and Amazon decided to increase their drop to match? Amazon would have already evaluated what they could drop to, so they'd know as soon as Google announced they could match.

Yeah, that could be it too.

I'm really just responding to the idea that "a mole" is farfetched. There's a reason that Apple is known for being incredibly paranoid about people leaking business secrets: it happens, often.

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#35

Post by evan_ »

nilsbunger wrote: post #31
evan_ wrote: post #5

I'm surprised this is being cast as Amazon responding to Google's price cuts- the AWS conference was scheduled months in advance so if anything Google heard about the price cuts and announced their own just ahead of the conference as a (successful; apparently) attempt to take the wind out of Amazon's announcement. Interesting that they dropped by the same amount; either it was a lucky guess, Amazon adjusted their adj…

If I were amazon, I would've prepared to do a price cut when Google announces one. Then when they announce it, just push the button. Why give up margin earlier than necessary? * Of course waiting to do a price cut till their competitor does leaves a bad taste in some customers' mouths. But I bet they think they're far enough ahead that it doesn't matter. Would Netflix and similar big AWS customers really leave AWS ov…

if it had been a random price-drop announcement then this might be applicable, but everyone was pretty sure that Amazon was going to announce a price drop at re:Invent.

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#36

Post by slattery »

umsm wrote: post #16

As I look at the pricing wars, I realized something: If you choose to use "cloud" based in your projects or businesses, you will never know the long-term costs associated with operating in the cloud. The cloud provider can raise or lower prices as they see fit. What prevents these for-profit companies to keep lowering prices and not raising them?

I think the only reason prices would ever go UP, would be if the cost of generating electricity went up.. In which case, your in-house computing would cost more, as well.

Short of that, the trend seems to be costs going DOWN. Amazon recently noted their 42nd price decrease.

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#37

Post by slattery »

I wonder if Digital Ocean will even lower their rates?

For now, I've noticed their Competitor Pricing page is just redirecting to their normal pricing page.

https://www.digitalocean.com/competitor-pricing/ (just redirects)

Cached copy: http://webcache.googleusercontent.com/search?q=cache:I33lI_P...

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#38

Post by jjh42 »

h1karu wrote: post #29
jamiesonbecker wrote: post #25

Earlier quoted context omitted.

You can pre-warm without a support subscription if you want to take the time (and know how) to do it yourself.

fair enough.. I didn't realize there was a good solution to pre-warm yourself but I suppose it makes sense that it should be possible. My intention with the comment was to point out that we're not comparing apples with apples when it comes to flexibility of the core infrastructure.. and load balancing is about as core as it gets. Both platforms have features that the other doesn't have for example GCE has Persistent…

Btw. Google now has a similar DNS service https://developers.google.com/cloud-dns/what-is-cloud-dns

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#39

Post by cmelbye »

awj wrote: post #26
pdq wrote: post #9

Earlier quoted context omitted.

I'll go with Occam's Razor: Amazon just responded to Google's newly announced pricing. To believe they guessed correctly or they have a "mole" is pretty far fetched.

So your version of Occam's Razor is "Amazon hurriedly cut prices on a profitable service without much time for evaluation" over "someone at Amazon told Google about upcoming price changes while Google had time to decide they could jump in early on it". I'm not saying that either interpretation is wrong , but I think your use of Occam's Razor here says more about your assumptions than the nature of things.

So in this explanation, Amazon does not proactively investigate how much they can cut prices while remaining profitable? That doesn't make much sense, does it? It would make sense that Amazon knows exactly how much they can cut prices so that they can immediately respond to price cuts from competitors in their highly competitive market.

Re: AWS Responds with Price Cuts: Google vs AWS Pricing Round 2

#40

Post by qq66 »

evan_ wrote: post #5

I'm surprised this is being cast as Amazon responding to Google's price cuts- the AWS conference was scheduled months in advance so if anything Google heard about the price cuts and announced their own just ahead of the conference as a (successful; apparently) attempt to take the wind out of Amazon's announcement. Interesting that they dropped by the same amount; either it was a lucky guess, Amazon adjusted their adj…

I've worked in competitive pricing before and have a little knowledge of how this works.

At all times, companies in competitive situations have a basic economic model they use for pricing. Individual sales reps are allowed to cut price to X level for orders above Y quantity, and if they want to violate that price floor they need executive approval.

Simultaneously, the companies have models that are dependent on competitive pricing -- that take into account some assumptions about price and how it affects market share. When a competitor moves in one direction, the executives consult this model to decide how to respond, but at least in the situation I was in, the final decision of how much to cut price was a seat-of-the-pants decision by the EVP of Sales.

By "model" I mean an Excel spreadsheet, but I'm sure Amazon is far more sophisticated.

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