Rackspace -- one of Amazon's primary rivals in the cloud computing game -- is slashing prices on many of its online services.
On Friday, the San Antonio, Texas company announced a 33 percent decrease in the cost of network bandwidth on its content delivery network, or CDN, and its cloud services, including Cloud Servers, Cloud Files, and Cloud Load Balancers. All these are services that developers and businesses can use to operate websites and other software applications.
The company is also providing additional pricing options for its Cloud Files service, used to store vast amounts of data. Previously, the company charged a flat fee of 10 cents per GB of storage space. It's now offering bulk discounts for larger amounts of storage:
The new storage plans go into effect on Friday, and the new bandwidth pricing starts March 1.
Rackspace boasts that its pricing is simpler than Amazon's. The comnpany's prices have always looked more expensive than Amazon's at first glance, but Amazon's pricing can be comically convoluted. Once you start to calculate the cost of support and factors like separate fees for inputing and outputing data, Amazon's competitors look more attractive. Rackspace's new prices are more in line with Amazon's, and it's hoping the simplicity of estimating costs will attract more customers.
But price complexity may not be a problem with the types of customers who use these services. "IT will understand that it is not always cheap to go with public cloud," says Rishidot Research analyst Krishnan Subramanian. "Now there is more exposure to the pricing dynamics than anytime in the past."
The moves may be a response to Amazon slashing its storage prices last November. But Subramanian says it's going to be hard for companies like Rackspace to compete with Amazon on price.
"Amazon always had wide latitude in terms of margins and they were waiting for competition to heat up so that they can engage in price war," he says. "Now that Rackspace, Google and others are starting to compete hard in the public cloud market, they have started the rush to the bottom game in terms of pricing."
It appears to be price adjustment season. Just yesterday Google announced more pricing tiers for its cloud services.
