Data Backup Digest

Cloud services become more popular by the day. It seems that a new one is popping up out of the ground everywhere you turn. All these boxes and drives… the choice is vast and it’s enough to make your head spin.

It might seem daunting choosing a cloud provider at first, but this actually has a huge benefit. The fact that so many different companies are trying to compete for your money on a crowded marketplace means a lot of things. Recently, there is one thing in particular that these providers have taken to tackling: the price.

Amazon Web Services is something that leases out the corporation’s vast computing power, allowing smaller companies to make use of their infrastructure. Horsepower and storage can be rented direct from Amazon, meaning that businesses no longer need to have these facilities themselves. Previously it was a costly procedure, but companies like Amazon are making it more affordable.

Of course, Amazon isn’t the only ones out there. Giants like Microsoft and Google are also out to claim a piece of the pie.

It’s led to a price war, with all three services cutting prices on their various services by up to 85%. When it becomes hard to differentiate on product, these companies go straight to the price.

It is estimated that companies will spend around $13.3 billion on renting horsepower from services like Amazon. It’s up 45% from last year, but it’s still less than 10% of total spending on computing centres. As it stands, though, it’s only likely to increase.

Simon Margolis, a technology consultant at SADA Systems, says that a medium-sized website with 50 million monthly page views may spend around $1200 a month on their online infrastructure. The same service from somewhere like Amazon, Microsoft or Google is likely to cost around $270 to $530. Present those savings to corporate and it’s clear who the winner will be.

A lot of big companies will use a combination of their own and rented computing power. However, a survey by RightScale suggests that around 87% of technology executives use an outsourced cloud provider for at least one task.

For the largest of organisations, it is often actually cheaper for them to have their own IT infrastructure, rather than renting it out. It’s more reliable, too. Additionally, regulated industries, like health care, will want to keep sensitive data on their own systems. This is now actually a concern across all industries due to the NSA revelations. However, where cloud computing really thrives is for those small to medium sized organisations that can’t afford to build their own services.

For now, though, the big services will continue to try and capture the market with their low prices. One real-estate company in America uses Amazon’s services to process a lot of their data. They recently found that their bill had been cut in half by Amazon, allowing the firm to add extra employees to the team to develop their services.

“Nobody ever gives you a 40% price break overnight,” said the owner. “Our direct benefit is the opportunity to create more products, faster.”