Amazon tries to lock in long-term cloud customers with price cuts

Amazon.com is slashing the price of one of its core cloud-computing services to try to lock in more long-term users. The online retail giant is lowering the fee for "reserved instances" of its EC2 service by 30 percent. The reserved instances -- which let developers make a one-time payment to reserve cloud-computing for future use -- are part of Amazon's strategy to move cloud customers beyond the on-demand, pay-as-you-go model into more regular users.

Here's more from Amazon's announcement:

Starting today, we have lowered the one-time fee for all Amazon EC2 Reserved Instances by 30%. We continuously strive to be more efficient, and to pass cost savings on to you in the form of lower prices. With Linux Amazon EC2 Reserved Instances, you could reduce the cost of your instance usage by up to 56% compared to an On-Demand instance. When using Reserved Instances, you pay a low, one-time fee to guarantee capacity for each instance during a 1 or 3 years period. You then have the option to run that instance whenever you want, at a greatly reduced hourly rate.

Amazon Web Services evangelist Jeff Barr gives a further breakdown of the price cuts on the AWS blog.

Is this a response to Microsoft Azure or other competing cloud services?

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About Eric Engleman

ERIC ENGLEMAN is senior technology staff writer for TechFlash and the Puget Sound Business Journal, covering online retail giant Amazon.com. Engleman tracks Amazon's increasingly complex business, spanning ecommerce, Kindle, cloud computing, and more. He's been covering technology and other industries for the Business Journal since 2003.

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