Hacker News Reader

Comment by nikcub | Hacker News Reader

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

View on HN

But did those "internal docs" take the increasing power of colo machines (or rent) into account? The colo you buy next year probably is more powerful than the one this year. If you take AWS price decreases into account, you'd need to take increasing power (and decreasing prices) for colo into account.

Hetzner where I have servers increases the machine power (and sometimes decreases prices) every year.

http://www.hetzner.de/hosting/produktmatrix/rootserver-produ...

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.

In case anyone believes this comment (that "until recently" there have even no price drops), I will throw in an alternative anecdote (as I'm at a restaurant and am not interested anyway in digging up alternative evidence: readers can do that themselves), Amazon has decreased their prices for all kinds of things many times; bandwidth quite often, servers a few times... I actually find myself misquoting Amazon's prices in conversations often due to having lost track of random price drops.

The one thing that hasn't dropped is where 99% of my costs are: the price of a PUT to S3.

We're talking about two different things -- price drops vs. discounts.

They drop prices across the board all the time. They don't do individual negotiated prices at time T which are different for one customer vs. another customer. (they just started doing this a few months ago, in the form of offering special services to some customers but not others, and now in terms of volume pricing discounts).

All hosting providers drop prices over time (mainly by increasing the amount of RAM per server at the same price, vs. dropping the pricing of packages) for some things (and tend to raise for power, cooling, and physical space). But everyone except Amazon usually also does individual negotiation of prices.

Amazon do negotiate individual prices in some circumstances.

I'm not entirely sure what circumstances it takes to make them negotiate, but the discounts I've heard about are significant. It doesn't seem to be based on the size of the deal though.

The only times I've heard of this were GovCloud (which costs more, but includes a lot of extra service) and the recent announcement of volume based pricing (which is sort of individual in a way).

Dropbox, Heroku, and Netflix would be the authoritative data points, I think. I've heard "won't do anything custom", but I never really pushed to find out about discounts. Even if they do exist, they're nowhere near as common as with every other provider (where either you get a marketing deal discount, or can just get a discount for the asking, especially early on, or as you grow).

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.

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.

I don't think there were price decreases of the hourly prices for EC2 instances - previous decreases were for traffic, or introducing reserved instances where you get lower price in exchange for commitment.

I think trying to factor in future price decreases in an ec2 cost model doesn't make sense - it is too little and unpredictable to worry about. Don't forget that if you reserve an instance for 3 years and Amazon drops prices, you'd get only partial savings on the hourly fraction of the cost. Even as I use Amazon for hosting (instances running full time) I stay away from the 3 yrs reserved instances because I want to be able to reevaluate my options more frequently.

They definitely dropped hourly instance prices. They started at $0.10/hr for a small instance.

Probably not for the Asia Pacific Singapore region.

Few months ago, the on demand hourly price for a small instance is 0.085, now it's 0.09.

There's definitely a significant decrease for reserved small instances.

Edit: Reserved micro instances also went up.

I am pretty certain that the price was 0.095, not 0.085.

Reply on news.ycombinator.com