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Amazon follows Google in slashing cloud computing prices

A zoomed image of a computer screen showing the Amazon logo is seen in Vienna November 26, 2012. REUTERS/Heinz-Peter Bader
A zoomed image of a computer screen showing the Amazon logo is seen in Vienna November 26, 2012. REUTERS/Heinz-Peter Bader

By Deepa Seetharaman

SAN FRANCISCO (Reuters) - Amazon.com Inc will drop prices on most of its cloud computing services starting April 1, the largest U.S. online retailer said on Wednesday, a day after rival Google Inc outlined a major price cut of its own.

The price cuts range from 10 percent to 65 percent, Andrew Jassy, senior vice president of Amazon Web Services, told a conference for Amazon web developers in San Francisco.

This marks the 42nd price reduction for AWS since its introduction eight years ago. In a separate press release on Wednesday, the company said the U.S. Department of Defense deemed Amazon's cloud computing service secure enough to be used more broadly within the department.

AWS provides the underlying infrastructure for popular Web companies such as online movie streaming service Netflix Inc and social network Pinterest.

Cloud services have become increasingly popular among both cash-strapped tech startups and larger companies, which rely on computers owned and operated by the likes of Amazon and Google, the world's No. 1 Internet search engine, instead of buying the equipment themselves.

Amazon, which pioneered public cloud computing in 2006, remains a dominant force in the industry. Its fast-growing AWS business helped transform the company from traditional online retailing into a tech industry giant, and is often cited by investors as a major pillar of its future growth.

But others are making inroads. Earlier this week, Cisco Systems Inc announced plans to spend $1 billion over the next two years to build a new cloud services business.

AWS has five times the computing power of its 14 rivals combined, Jassy said during his keynote address, citing an analysis that industry consultancy Gartner published last August.

"When you look at all those capabilities, they don't exist anywhere else," Jassy said.

(Reporting by Deepa Seetharaman; Editing by Stephen Powell, Bernard Orr)

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