The Doppler Quarterly Winter 2018 - Page 28

Are the Latest Cloud Price Wars Just a Marketing Gimmick? Alexey Gerasimov As the cloud price wars rage on, "cheaper servers” shouldn’t be the only reason for moving to the cloud. The cloud price wars are still on. Granted, these are now nowhere near what they were a couple of years ago when Amazon and Google tried to outdo each other with a relentless price slashing. If you remember those days, one of the big vendors would announce every quarter yet another round of price cuts, which was quickly followed by a competitor responding in kind. After a while, they probably realized that the desire to be first in a race to the bottom had to stop. Don’t get me wrong, slashing prices so customers spend less is a very good thing. But it can’t go on forever. We all know the saying “we need to do more with less,” but if we keep going down that path, we will eventually have to “do everything with nothing,” and that’s not sustainable. The following two charts illustrate historical price cut trends, as well as some specific server price reductions on AWS. 14 13 12 Number of AWS Price Cuts / Year 10 8 7 6 5 5 7 5 4 2 0 0 1 3 2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Figure 1: The Number of AWS Price Cuts per Year 26 | THE DOPPLER | WINTER 2018 6