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IBM slashes SoftLayer prices and plugs it into more data centers

IBM follows Amazon, Microsoft, in lashing SoftLayer cloud gear to fibre in colocation bit barns

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The great homogenizing force of cloud economics rolls on, this time pushing prices for IBM's SoftLayer cloud close to those of rivals Amazon and Microsoft.

In yesterday's case of Adam Smith's invisible hand gently forcing a corporation to cut prices below rivals and grab some business along the way, IBM announced that it was dropping SoftLayer object storage prices to $0.04 per gigabyte per month, lightly cutting compute prices, and adding a low-cost networking service that lets companies rent a secure, high-bandwidth connection into the cloud.

By cutting its storage prices, SoftLayer has brought its prices into parity with prices far below the $0.085 per gigabyte offered by rivals Amazon ($0.03 per GB per month) and Google ($0.026 per GB per month) and Microsoft ($0.05 per GB per month).

It also added a connection option named Direct Link, which allows SoftLayer customers to create private, dedicated connections into the cloud from 18 IBM network points of presence around the world.

This means that a customer with a rack in a Softlayer-linked data center from Equinix, Coresite, Terremark, Pacnet, Interxion, TelecityGroup, or Telx, can now rent a dedicated connection between their computer gear and IBM's cloud.

The scheme is similar to Microsoft's Express Route and Amazon's Direct Connect schemes, with the main variation being a greater diversity of suppliers for IBM's scheme, plus lower pricing.

Direct Link connections are available now and cost $147 per month for a 1Gbps connection or $997 per month for a 10Gbps one. This also undercuts Amazon and Microsoft, which charge, respectively, $219 and $600 a month for equivalent 1Gbps services.

"Direct Link itself is a similar product offering to others in the marketplace, but the use case is different because it gives access to SoftLayer's cloud platform and network," IBM's SoftLayer veep of product innovation, Marc Jones, told us via email. "SoftLayer has had this service available to select customers for several months already, and IBM's large enterprise install base was requesting this service, so this is the official 'productization' of the service."

Although SoftLayer has some advantages over its larger rivals – such as bare metal servers that guarantee higher performance at the cost of more ornate manageability requirements – IBM is yet to build out the set of services on the cloud to gain parity with rivals. But as these announcements go, when it comes to low-end services and storage prices, market forces are beginning to dictate the actions of cloud providers far more than any individual corporate strategy.

Perhaps Equinix's dream of an "intercloud" made of multiple cloud providers all linked together by cables in Equinix data centers may be not so far-fetched?

An earlier version of this article indicated that SoftLayer had cut prices below Amazon and Microsoft, when in fact it had attained parity with them – we regret the error. ®

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