Amazon Virtual Private Cloud Prices slashed by up to 80%

Amazon Web Services cut prices for its so-called dedicated instances, which represent the company's offering of Virtual Private Cloud services. AWS' dedicated instances are essentially virtual machines that are allocated to single customers and are not run on hardware shared by users. As a rule, cloud resources are based on multi-tenant services, meaning a number of customers runs workloads on shared virtualised hardware.

Amazon Web Services' VPC' (Virtual Private Cloud) provision of dedicated instances is aimed predominantly at companies not wishing to share public resources with others. Dedicated instances are as close to private cloud services as Amazon currently gets. Unlike other private cloud offerings, however, resources are not hosted on customer sites, but on Amazon's infrastructure.

According to a company blog post on July 11, 2013, AWS has now slashed dedicated instance pricing by up to as much as 80 per cent. To use the dedicated instances services, users have to pay an hourly fee, which has now been dropped fro $10/ hour to $2/ hour. In addition to adjusting the base-level expense of using these services in this manner, AWS also implemented a 37 per cent drop on per-hour prices. In the East of the US, for example, a dedicated instance previously costing $0.840/ hour now costs only $0.528/ hour. Prices of reserved dedicated instances, a service allocating resources to customers on long-term contracts (as opposed to billing per hour), were dropped by up to a possible 57 per cent.

According to AWS, dedicated instances are perfect for workloads run in situations where industry regulations/ corporate policies dictate physical, host-hardware-level isolation from instances that are being run by others.

It has been questioned whether AWS will ever private cloud services customers can run from their respective premises, and no indication as to whether there are plans to do this in the pipeline were given by company officials. For the moment, AWS just offers dedicated instances and VPC.

The reduction in AWS cloud computing prices, the 37th drop undertaken by the company, could well mean cloud computing prices will be dropped elsewhere. More often than not, one company dropping prices is followed by others comparatively soon after. An example of this is Microsoft's announcement, made early this year, to match Amazon price reductions for the MS Azure platform.

One thing is for sure: considering the fact that no company on the planet will reduce prices to the point of making losses, these reductions indicate just how much profit is really being made through virtual cloud services.

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