
Dropping Prices Again-- EC2, RDS, EMR and ElastiCache - jeffbarr
http://aws.typepad.com/aws/2012/03/dropping-prices-again-ec2-rds-emr-and-elasticache.html
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nikcub
Does anybody have a history of AWS price decreases?

I have seen a lot of startup internal docs where they compare the costs of AWS
with colo, other cloud etc. and not one of them took into account the
discounts that Amazon applies. Chances are that over 3-5 years you will see a
number of price discounts - one of the only providers that does this for
existing purchased infrastructure, keeping your costs in line with savings
from Moore's law rather than locking in for years.

I would like to know the complete discount history because there would be
enough data points now to project estimated discounts forward

~~~
rdl
If you rent servers or buy colo from anyone else, you can ALWAYS renegotiate
all prices based on a new level (if you've got a cage and want to expand to a
floor, it becomes a negotiating point; you don't get stuck paying the higher
price on that cage and a lower price on the floor.

Until very recently, the only Amazon discounts I've ever heard of were the
Reserved Instances (which really only makes sense once you're familiar with
your needs). Inability to negotiate pricing is one of the main reasons a lot
of consultants still go with non-Amazon options -- the client sees the list
pricing for EC2 and knows what markup you're applying, vs. another option (or
your own cage/suite/floor/facility) where you can consolidate all the charges.

~~~
justincormack
If consultants can't do business by adding a line item for their costs and
have to mark up what you buy then don't hire them.

~~~
rdl
There are a lot of resellers of various services with different levels of
value-add. The reality of the hosting business is that different providers
give different levels of service, and in a lot of industries you do not want
your customers to know your costs, so breaking it out as a separate line item
isn't always optimal. Businesses actively try to avoid their product being
viewed as a commodity.

There are also purchasing people in big companies who are paid to negotiate
down quotes. If you tell them there is only one price for EC2, and they can't
get a 5% discount for a large order, they will in some cases have a perverse
incentive to go to a more expensive (list price) provider who will give them a
discount (so they appear to be doing their job), even if the total price ends
up higher, or the service ends up worse. This is one of the many problems with
enterprises.

I'm not saying which model is better, but it's definitely a factor with some
clients.

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zepolen
Most dedicated hosting solutions offer some bandwidth in their pricing and not
a trivial amount either. 3TB a month is not uncommon which would cost an extra
$350 a month on Amazon. If they want to compete vs dedicated hosts and it
seems they are with all these price drops and reserved instances, they should
take that into account, because right now they are just way too expensive.

~~~
webjunkie
We actually get 10 TB included... :)

~~~
RKearney
You get 100TB at 100tb.com... :)

~~~
wildmXranat
I dropped my account with them because their network could never push data
faster than a few MB/s. Just personal experience.

~~~
toomuchtodo
Bandwidth =! total data transfer

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bonaldi
Not dropping the hourly rate for existing reserved instances leaves me feeling
very short-changed.

~~~
epi0Bauqu
Yes, I feel like an idiot now for just buying a bunch of reserved instances.
By my calculations if you just bought a reserved instance you'd actually save
money by rebuying it if you plan to run it heavily over the three year period!

~~~
cperciva
I've been holding off on buying reserved instances because it looked like they
were overdue for a price cut. Even now I'm not sure if I should go ahead and
buy -- sure, I'd save money compared to the current on-demand instance prices,
but is the 2012 reserved pricing cheaper than the 2014 on-demand pricing will
be?

I really hope Amazon adds more transparency into the pricing so I can stop
worrying about things like this.

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guynamedloren
Slightly off topic, but...

I launched a little web app about a year ago to play around with AWS and to
take advantage of a free trial. It has grown organically with absolutely no
marketing and even got covered by Lifehacker. It's a filesharing app for
groups and is used heavily by the education sector.

My free trial period expired a few months ago and I don't know if I can
justify supporting the app. I've put it maybe 10 minutes of work since I
launched it a year ago, and have not yet attempted to monetize. Anybody
interested in taking this off my hands? Cash or something else? I'm open to
ideas.

~~~
nl
How much traffic?

You could try selling it on flippa.com

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verelo
So i could just be dumb, but there is something about this pricing that
doesn't make sense to me. All of this is based on micros in the Virginia
region, and having them for 12 months.

 _On demand for 12 months: $170 = (0.02_ 24 * 365)

 _Spot instance for 12 months: $52.56 = (0.006_ 24 * 365)

 _Light utilization - reserved for 1 year: $128 = (($0.012_ 24 * 365) + $23)

 _Medium utilization - reserved for 1 year: $115.32 = (($0.007_ 24 * 365) +
$54)

 _Heavy utilization - reserved for 1 year: $105.80 = (($0.005_ 24 * 365) +
$54)

I get that the spot instance price may change, but it would likely always be
lower than on demand and given that the others prices change, are they just
the best option?

So...maybe the marketing words are getting me confused, but i thought that
heavy would be more expensive? Or is this telling me that i'm located with
other heavy users, therefore i'm getting less and i pay less?

Today we use a lot of micros, i'm starting to realize how much we could save
if we switch...however whats a "better server" a heavy or a light?

~~~
Judson
From Amazon:

Light Utilization:

"Light Utilization RIs offer the lowest upfront payment of all of the Reserved
Instance types. Along with this low upfront payment, you’ll receive a
significantly discounted hourly usage fee. Light Utilization RIs allow you to
turn off your instance at any point and not pay the hourly fee."

Medium Utilization:

"Medium Utilization RIs are the exact same Reserved Instances that EC2 has
offered for the last several years. They have a higher upfront payment than
Light Utilization RIs, but a much lower hourly usage fee. Medium Utilization
RIs allow you to turn off your instance at any point and not pay the hourly
fee."

Heavy Utilization:

"With this RI, you pay a little higher upfront payment than Medium Utilization
RIs, a significantly lower hourly usage fee, and you’re charged that lower
hourly rate for every hour in the Reserved Instance term you purchase."

Source: <http://aws.amazon.com/ec2/reserved-instances/>

~~~
verelo
Yeah i get the pricing of light and heavy etc....but it doesnt actually state
if they are different in performance or if its just a pricing thing?

If its just a pricing thing, the difference between $23 - $54 to add an extra
$15 / savings over a year seems reasonable to me...but if there was a
performance hit i'd think again.

~~~
gduffy
It's only a pricing thing. (Think of it as a variable capex/opex tradeoff)

Source: AWS guys that I met a couple of weeks ago were repeating this like a
mantra (I think they get a lot of support requests for it)

~~~
verelo
ah ok then. Well i guess thats good news. That will make our business a lot
cheaper to run...

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akh
We're almost done updating over 2,000 prices from AWS clouds:
[http://blog.shopforcloud.com/2012/03/were-updating-
over-2000...](http://blog.shopforcloud.com/2012/03/were-updating-
over-2000-prices-from-aws.html)

You might prefer to use ShopForCloud.com to get cost estimates rather than use
Excel spreadsheets. They have a lot prices to update, for example, EC2 has 7
clouds x 13 types of instances x at least 3 OS choices (Linux, Windows,
Windows with SQL Server) x at least 4 purchase options (on-demand,
light/medium/heavy-utilization reserved) => 1,092 individual prices! Just goes
to show that they have pretty complicated pricing schemes.

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vilda
It's fair to mention that maintenance of your infrastructure on AWS is far
from negligible. This is not unique for private clouds.

Especially given certain unpredictability in instance and EBS performance.

~~~
Drbble
EBS is like the Matrix part III and Star Wars Episode I... It is best if you
ignore the rumors that it exists.

------
staunch
Must be kind of funny to look at their accounting reports.

"Thanks everyone for your hard work this week. We're making substantially less
money than last week. Let's keep it up people!"

~~~
jurre
You can either sell one can of soda for $5 profit or you can sell ten for $1
profit.

~~~
batista
Or you can sell 1 for $1 profit, and lose $4 dollars over one sell at $5.

Lower prices != more volume guaranteed, you have to find an equilibrium.

~~~
nkohari
Something tells me Amazon understands price elasticity pretty well.

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itmag
Off-topic but relevant: does anyone have a good up-to-date tutorial on how to
get started with cloud computing? Ie different alternatives, and pros/cons of
each. And some info on how to get started doing common tasks.

~~~
eddy_chan
I wrote a basic primer for django on EC2 to take advantage of the free tier
last week here: [http://eddychan.com/post/18484749431/minimum-viable-ops-
depl...](http://eddychan.com/post/18484749431/minimum-viable-ops-deploying-
your-first-django-app-to)

~~~
mixmastamyk
Thanks, I'll need this in a few weeks.

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johnlauck
If only mobile phone service providers followed the same path...

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wavephorm
I'm anxiously waiting for that moment where cloud storage becomes cheaper than
buying a hard drive. Only at that point will consider I going all-cloud.

~~~
dinkumthinkum
As a heavy EC2 user, you have got to think about the performance
ramifications. EC2 EBS disks are abysmal in terms of performance.

~~~
rogerbinns
I keep wondering why Amazon doesn't fix this. The problem isn't so much the
baseline performance which isn't stellar but can be designed to, but rather
the massive variance in performance that arbitrarily changes moment to moment.

~~~
rdl
Arbitrary configuration networked disk is Hard, probably harder than anything
else AWS does. Enterprise still spends a lot on storage (generally big
hardware RAIDs, dedicated storage area networks, etc.). 1 GB of enterprise
storage might cost 50-100x the base per-GB cost of the cheapest SATA disk, by
the time you include all the costs. No AWS customer wants to pay that much of
a premium.

You can often build a storage system for a very specific purpose more more
cheaply (maybe 3x the base drive cost?), like the Backblaze pods, or just
figure the cost of adding 4-8 x SATA drives and software RAID 10 to each of
your servers, but then you get to try to solve the filesystem problem, and
have weird performance characteristics. Plus, if you think EBS reliability is
bad (it is), wait for the joy of statistically significant number of spinning
rust drives in anything not designed with enough redundancy, and where some
failures are correlated (trays failing at the same time, controller bugs,
...).

One of Google's big advantages was always their Google File System. And GFS is
a lot better for the specific loads in search than for the kind of loads
applications like gmail impose.

Local instance storage is really the only performant and cost effective thing.
You can hang a lot more direct attached disk off your own server than off any
AWS instance (1.7TB).

The other area where AWS kind of falls down is "mad RAM" servers. I can buy
288GB RAM servers (18-slot) cheaply now (well, 144GB is cheap, 288GB is less
so), and 2TB RAM is available (64-slot). AWS tops out at 68GB for about 5x the
lease payments on these servers (so maybe 2x the loaded cost after Reserved
Instance discounts)

~~~
zorked
Moving from MySQL on EBS to a Cassandra cluster on locally-attached ephemeral
storage was the first time I was happy with a database on EC2.

EBS is convenient as a permanent root for instances, but for anything that
actually uses the disk, it's a pain train. I think of it as a large "pen-
drive" for the cloud these days.

