Amazon Web Services announced earlier this month that the prices for its dedicated instances, which are virtual machines specific to individual enterprise customers and do not share hardware, would have their prices slashed by as much as 80%. The price drop has been suggested as a stopgap measure meant to entice a PRISM wary business community back into using Cloud services and virtual server hosting.
How it Works
In most cases, Cloud services are multi-tenant. This means that multiple Cloud customers are running their services on the same virtualized hardware. In the case of Amazon Web Services' dedicated instances, customer can have their Cloud services run through individualized hardware that is a part of Amazons infrastructure.
These dedicated instances are considered to be the backbone of Amazon Web Services' "Virtual Private Cloud" and are the closest thing product offering to a private cloud hosting solution as Amazon Web Services will ever come.
Amazon Web Services indicates that their dedicated instances are "ideal for workloads where corporate policies or industry regulation dictate physical isolation from instances run by other customers at the hardware level." When asked about the possibility of private cloud services with Amazon Web Services, company officials respond with the Amazon Web Services "Virtual Private Cloud" and dedicated instances.
Amazon Web Services use a per-hour fee for access to the service and until recently charged $10 per hour. With the new price changes the same services will now cost $2.00 per hour. Other price cutting measures were announced that included 37% price drop for dedicated instances and up to 57% price drop on long-term reserved dedicated instances. This is the 37th time that Amazon Web Services has reduced the pricing on its Cloud computing services.
Will the price cuts bring back customers who were shocked at the invasiveness of PRISM or entice enterprise customers to consider virtual hosting and cloud services? Only time will tell.