Why Are Amazon EC2 Cloud Computing Costs Falling ?

Working with Amazon EC2 is becoming increasingly attractive and the go to service for Infrastructure as a Service (IaaS) not only because of the highly attractive costing model but also the rich range of functionality available.

The release of the Amazon Linux and Windows Micro Instances recently is an example of their expanding range of available services. The release of these EC2 Micro instances received much attention and rightly so, but at the same time, at the other end of the scale, and with almost no publicity, Amazon lowered the price of its EC2 high memory double and XL instances. Such moves are welcome by all current users and also make it more attractive for new users considering entering the cloud.

Following the cost and adoption of the cloud is interesting. A major benefit of using the cloud is a reduced cost in IT expenditure. One of the questions I am often asked when consulting or teaching Cloud Computing is “Will the performance of the cloud suffer as more people adopt Cloud Computing?”. Such a question is a valid concern and there will be examples of a cloud provider failing to scale as required. This type of interruption can be expected as new technology evolves but is and will be rapidly resolved.

In the case of Amazon, they have a mature (4 years) infrastructure and proven scalability model and are now in a position that as they continue to grow at a rapid pace can expand their infrastructure accordingly with minimal glitches. The savings they are able to make in economies of scale are being passed onto customers also. The result of this is a more attractive proposition for all concerned. As other organisations develop their services the competition will help keep the prices low and the functionality and service levels high.


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