Feeds

Amazon slices prices on dedicated EC2 private cloud puffs

You'll think we've gone MAD down here at Crazy Jeff's rental hypervisors

Internet Security Threat Report 2014

Maybe there's something in the water – or in the coffee – in Seattle that makes big companies create and maintain monopolies through aggressive pricing. First Microsoft with its Windows desktop and then server monopoly, and now Amazon Web Services with its unending price cuts on its infrastructure cloud.

The latest chopfest comes to the dedicated instances that AWS lets customers carve out of the EC2 compute cloud. On the normal EC2 cloud, you can do on-demand, reserved, or spot compute capacity buying, but you are on multi-tenant cloud and you have no control whatsoever of the noisy neighbors on the Xen hypervisor upon which you share a physical x86 server. With dedicated instances, Amazon cordons off a part of its server infrastructure and isolates your workloads solely on those machines. In some cases, such isolation is required by business practices or government regulations, and in many cases it is preferred. But as you might imagine, you pay a premium for having a set of physical servers all to your lonesome.

Retroactive to July 1, the price for dedicated instances has been cut rather dramatically. In a blog posting, AWS said that it has cut prices by as much as 80 per cent across its dedicated EC2 instances, which come in on-demand and reserved flavors but do not have spot pricing available.

Specifically, the per region fee for setting up dedicated servers has dropped from $10 per hour to $2 per hour; this fee is for the hassle of setting up dedicated virtual servers and you have to have at least one dedicated instance running in a region. The pricing for dedicated on-demand instances goes as high as 37 per cent off the prevailing price at the end of June; for example, the cost of an m1.xlarge instance in the US East region in Virginia costs 52.8 cents per hour, down from 84 cents per hour. Dedicated reserve instances received up to a 57 per cent price cut, says Amazon, on both the upfront fees you pay to reserve capacity ahead of time and the hourly usage fees for particular EC2 instance sizes. After the price cuts, dedicated reserved instances cost 65 per cent less than dedicated on-demand instances on EC2, so obviously Amazon wants you to buy some base capacity and then some flexible capacity on your dedicated iron.

This marks the 37th price cut that AWS has done on its various cloud services since in launched the EC2 cloud back in early 2006. And all public cloud providers are probably wondering how they are going to keep pace with the AWS price slice machine.

Here is a comparison of the normal and dedicated on-demand pricing for Amazon's own Linux implementation running on server slices in the US East region data centers after the price cut that was announced today:

The premium for dedicated server slices on EC2 has come down to 10 per cent plus a per region fee.

The premium for dedicated server slices on EC2 has come down to 10 per cent plus a per region fee.

The virty server slices on dedicated iron only command a 10 per cent premium after the price cuts, as you can see in the table above. El Reg did not have a snapshot of the prices before they were changed, so we don't know precisely how big the gap was for each instance type, but suffice it to say that it is a lot smaller than it was. And, given Amazon's history of price cutting, at some point raw EC2 capacity prices will drop, the gap will widen again, and if Amazon wants to encourage more customers for its dedicated iron, it will close the gap back up again. One thing for sure: AWS is always testing the elasticity of its pricing as well as the packaging of cloudy infrastructure and services that run atop it.

At the moment, neither Google's Compute Engine nor Microsoft's Windows Azure infrastructure clouds offers dedicated iron underneath their slices. You have to share on top of the hypervisor, like it or not.

Of course, some savvy Amazon customers just buy the fattest instances they can at the regular pricing, which more or less ensures that a big fat noisy neighbor can't get onto the same physical machine, and this is a rough and ready way to get the same result on Compute Engine or Windows Azure. (This does not necessarily meet with best practices or regulatory requirements at some companies, of course.)

Rackspace Hosting does not have dedicated iron for its Cloud Servers public cloud, but it could offer it. SoftLayer, which was just eaten by IBM for something rumored to be north of $2bn, has dedicated cloudy server instances.

If Amazon gets traction with dedicated EC2 instances, you can bet that more public cloud providers will mimic it. ®

Beginner's guide to SSL certificates

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.