Amazon Chops Some Cloud Fees

November 2, 2012

I have been forced to pay attention to online pricing in the last couple of weeks. Pricing is a marketing play today. Most of the vendors I monitor are in the services business. The idea is that the software or the upfront fee is a way to get the billing ball in play. Once the software or service is up and running, then the opportunity exists for various add ons, options, and specialized services flips green.

I read “New EC2 Second Generation Standard Instances and Price Reductions.” The main point is a “slice and dice” action. A new service is created by making some distinctions. But the real hook for me was the price reductions. Who does not respond to lower cost. I do.

My question concerns Amazon’s need to grow its top line revenue. With the recent loss, Amazon is going to be under the watchful eye of stakeholders. These individuals want Amazon to generate growth and a profit. Maybe price cutting and loss leader hardware will pay off. The company is getting more interesting as it morphs into an Apple-Google variant of a giant online store.

Stephen E Arnold, November 2, 2012


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