Amazon.com is dropping the price of its core EC2 cloud computing service. Starting Nov. 1, the company will cut the price of all on-demand EC2 compute instances. Charges for Linux instances will drop by 15 percent. That means small Linux instances will now cost 8.5 cents per hour, down from 10 cents per hour. Amazon's price cuts come as Microsoft prepares to launch its own Azure cloud computing services.

Amazon is also adding new cloud computing tools, including a Relational Database Service and EC2 High-Memory Instances.

The company describes its new Relational Database Service (RDS) this way:

Amazon RDS provides a fully featured MySQL database, so the code, applications, and tools that developers use today with their existing MySQL databases work seamlessly with Amazon RDS. The service automatically handles common database administration tasks such as setup and provisioning, patch management, and backup - storing the backups for a user-defined retention period. Customers also have the flexibility to scale the compute and storage resources associated with their database instance through a simple API call. Amazon RDS is easy to deploy and simple to manage.

Amazon is launching a new set of High-Memory Instances "designed to be used with memory-intensive workloads such as databases, caching, and rendering, and are optimized for low-latency, high-throughput performance."

Update: Here's a breakdown of the new EC2 on-demand pricing:

Amazon CTO Werner Vogels also blogs on the new Relational Database Service.

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