Amazon's New Pricing Makes Cloud More Affordable


Amazon has done it again! They reduced the price for the 19th time in the last six years. The latest price reduction is significant because it impacts Amazon EC2 which is the most popular service of AWS.You can consume Compute on the AWS Cloud in one of the three forms; 1) On-demand which is available in a pay-as-you-go model, 2) Reserved Instances where you commit for a term of one or three years to enjoy discount on the hourly charges and, 3) Spot Instances where you bid for the unused capacity. Recently, AWS has introduced three types of Reserved Instances that aligns with the utilization pattern of your workload. By effectively leveraging these models, you can realize significant savings on your Compute bill.

The new pricing structure varies by the instance type and region and impacts both Linux and Windows instances. According to Jeff Barr, the cost of running a website on an m1.small instance was $876 an year in 2006 which will now cost only $250!

Below is a cost comparison chart of running a Linux instance in Singapore. You can find the old and the new pricing structure.

Along with Amazon EC2, AWS has also announced the cost reduction for Amazon RDS, Amazon ElastiCache and Amazon Elastic MapReduce. All the three services are priced similar to EC2.

One observation I made is that the per hour cost of running a Micro Instance is unchanged. May be it cannot get lower than that!

This announcement will not only make AWS customers happy, but it will also trigger another wave of price reduction from other players!

- Janakiram MSV, Chief Editor,


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