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Weak Economy Makes the Move to the Cloud Inevitable

AWS announced new pricing for SimpleDB last week

James R Hamilton's Blog

I’ve been arguing for several years that the utility computing pricing model and the ability to near instantly grow or shrink, make the move to the cloud inevitable. Enterprises normally move slowly to new technologies but when the price advantage is close to 10x, enterprise decision makers can and will move more quickly. The weak economy provides yet a stronger push.


Last week, AWS announced new pricing for SimpleDB and it's noteworthy: free developer usage for 6 months. No charge for up to 1GB of ingres+egress, 25 machine hours, and 1GB storage.

    To help you get started with Amazon SimpleDB, we are providing a free usage tier for at least the next six months. Each month, there is no charge for the first 25 machine hours, 1 GB of data transfer (in and out), and 1 GB of storage that you use. Standard pricing will apply beyond these usage levels, and free usage does not accumulate over time.

    In addition, beginning today, Amazon SimpleDB customers will now enjoy significantly reduced storage pricing, only $0.25 per gigabyte-month. This new rate reflects an 83% reduction in storage pricing.

    For more information, see Amazon SimpleDB now in Unlimited Beta

I’ve been arguing for several years that the utility computing pricing model and the ability to near instantly grow or shrink, make the move to the cloud inevitable. Google, Microsoft, Amazon, and numerous startups are all producing interesting offerings and all are moving quickly. Enterprises normally move slowly to new technologies but when the price advantage is close to 10x, enterprise decision makers can and will move more quickly. The weak economy provides yet a stronger push. It won’t happen at once and it won’t happen instantly but I’m convinced that in 7 years, the vast majority of enterprises will be using utility computing for some part of their enterprise IT infrastructure.

It reminds me of a decade and a half ago when nearly all enterprise ERP software was home grown. The price advantage of SAP, Baan, Peoplesoft, etc. was so great at the time that the impossibly difficult and slow move from home grown, internally written ERP software to packaged apps happened nearly overnight by enterprise standards. We see the same pricing advantage again with utility computing.

More Stories By James R Hamilton

James R Hamilton is an architect on the Microsoft Windows Live Platform team. He maintains an internal blog called Perspectives, with postings focusing on high scale services, data center operations, very large database, flash memory, service design principles, power efficiency and power management. After maintaining the internal blog for a bit more than a year he realized that about 25% of the content is public and could be posted externally. It now is, at http://perspectives.mvdirona.com/.

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