Amazon Slashes EC2 Linux Server Pricing By Up To 28 Percent

The price cuts, announced Monday, apply to EC2 Reserved Instances running Linux/UNIX, Red Hat Enterprise Linux and SUSE Linux Enterprise Server. They cover Amazon's Standard (m1), Second-Generation Standard (m3), High-Memory (m2) and High-CPU (c1) instances.

Amazon's High-Memory instances will see the biggest discounts, with customers in northern California and Europe saving 27.7 percent. "With this price reduction, Reserved Instances will provide savings of up to 65 percent in comparison to On-Demand instances," Jeff Barr, senior evangelist for Amazon Web Services, said in a Monday blog post.

[Related: Amazon Targets Oracle, HP With New Redshift Data Warehouse ]

Customers with more than $250,000 in active up-front Reserved Instance fees will automatically get additional discounts, Barr said in the blog post.

Amazon's Reserved Instances are for customers that know how much computing capacity they'll need in advance and offer discounted pricing in exchange for a one-time, up-front fee. They differ from on-demand instances, which let customers buy compute capacity by the hour on an as-needed basis.

Amazon has lowered its EC2 pricing more than 25 times since debiting the service in 2006. Its most recent cut came last month, when it dropped pricing for on-demand EC2 instances running Linux, with Standard (m1) discounts of 27.7 percent for customers in northern California.

While Amazon's latest price cut was probably in the cards for some time, its timing is interesting. Last week at VMware's Partner Exchange event, CEO Pat Gelsinger urged partners to talk their customers out of moving their on-premises workloads to the Amazon EC2 public cloud.

"We want to own the corporate workload," Gelsinger said at the conference. "We all lose if they end up in these commodity public clouds." VMware COO Carl Eschenbach also belittled Amazon as "a company that sells books" and urged partners to fight harder against its low-cost allure.

VMware, which for years avoided the public cloud Infrastructure-as-a-Service space, has had a change of heart and is now running a beta of its own public cloud, sources told CRN last week.

VMware isn't the only vendor in Amazon's crosshairs. Last month, Amazon launched Redshift, its new data-warehousing service, which aims to exert the same pricing pressure on traditional enterprise data warehouses as EC2 has done in cloud computing.

PUBLISHED MARCH 6, 2013