If Amazon (AMZN) keeps going at its current rate its going to cross a significant milestone, namely topping out its 1999 .com boom price of 100 $USD and change. This is from a low of 5.97 $USD in 2001. Is this just down to its fantastic success with S3 and EC2? Or are there other fundamentals at work?
Whats even more amazing is that Jeff Bezos has held onto the reins through this rollercoaster ride.
Mike Arrington asks “What ever happened to GDrive?” especially now with SkyDrive and a host of others offering large online storage for peanuts. Well its no biggy if you stop for a second to think past the mountains of technology that pour out of Google and realise that their primary business is advertising.
No huge insight there. The difficulty arises when you try to apply Google’s standard monetization strategy to raw storage. Sure you can index it, but only for each individual user, so you soak up scads of compute power without any power law results in terms of aggregated value for all the google search users. You could try and aggregate the results but you can bet dollars to donuts that joe user (and the EFF, FSF etc. etc.) would scream blue bloody murder about infringement of privacy, and they’d be right.
The other way Google normally makes money out of content is to stick a stream of adverts alongside but that won’t fly with remote storage because 99% of the consuming applications don’t have a mechanism to consume or display that ad stream (’cos guess who the vendor is?).
So now we have the rub, if your turn on GDrive you immediately have to allocate a gazillon gigabytes of storage for every tyre kicker in the northern hemisphere to try out the service, which ain’t small potatoes even for an outfit with a grid the size of Googles (can you say grid envy? :-)). Plus all the bandwidth in both directions (virtual storage takes bites in both directions, especially that bad boy webdav) and not a dollar of advertising revenue to be had. No wonder they said “woah there cowboy”.
Instead there is a tentative dip in the water for Google Docs and Google Web Albums. But you have to pay which kinda breaks the free for consumers model, That model has been at the heart of everything Google does (and that free model breaks poor Microsoft’s heart a little everyday so they must doing air punches all over Seattle).
Its seem clear that Google sees the way out of this conundrum by keeping you inside the Google World (Gmail, GDocs, GReader) where they can continue to face paint your browser with advertising. Unfortunately doing anything other than the daily flyer in GDocs is like pulling your own teeth out with a pliers which means its back to Microsoft Office for that quarterly results report.
So expect the burgeoning pay-to-play storage community to make hay while the sun shines especially with Amazon stepping up to fill the infrastructure gap.
Beaten out of a market by a book vendor, maybe those Google techies ain’t so smart after all 
And Microsoft, 500MB of storage? You must be havin’ a laff…
Got this note from Amazon Today -
This is a note to inform you about some changes we’re making to our pricing, effective June 1, 2007.
With Amazon S3 recently celebrating its one year birthday, we took an in-depth look at how developers were using the service, and explored whether there were opportunities to further lower costs for our customers. The primary area our customers had asked us to investigate was whether we could charge less for bandwidth.
There are two primary costs associated with uploading and downloading files: the cost of the bandwidth itself, and the fixed cost of processing a request. Consistent with our cost-following pricing philosophy, we determined that the best solution for our customers, overall, is to equitably charge for the resources being used - and therefore disaggregate request costs from bandwidth costs.
Making this change will allow us to offer lower bandwidth rates for all of our customers. In addition, we’re implementing volume pricing for bandwidth, so that as our customers’ businesses grow and help us achieve further economies of scale, they benefit by receiving even lower bandwidth rates. Finally, this means that we will be introducing a small request-based charge for each time a request is made to the service. Below are the details of the new pricing plan (also available on the Amazon S3 detail page):
Current bandwidth price (through May 31, 2007)
€0.15 ($0.20) / GB - uploaded
€0.15 ($0.20) / GB - downloaded
New bandwidth price (effective June 1, 2007)
€0.07 ($0.10) per GB - all data uploaded
€0.13 ($0.18) per GB - first 10 TB / month data downloaded
€0.12 ($0.16) per GB - next 40 TB / month data downloaded
€0.10 ($0.13) per GB - data downloaded / month over 50 TB
Data transferred between Amazon S3 and Amazon EC2 will remain free of charge
New request-based price (effective June 1, 2007)
€0.00 ($0.01) per 1,000 PUT or LIST requests
€0.00 ($0.01) per 10,000 GET and all other requests*
* No charge for delete requests
Storage will continue to be charged at €0.11 ($0.15) / GB-month used.
The end result is an overall price reduction for the vast majority of our customers. If this new pricing had been applied to customers’ March 2007 usage, 75% of Amazon S3 customers would have seen their bill decrease, while an additional 11% would have seen an increase of less than 10%. Only 14% of customers would have experienced an increase of greater than 10%.
We don’t anticipate making further structural changes to Amazon S3 pricing in the future, but we will continue to look for ways to drive down costs and pass the savings on to you.
Sincerely,
The Amazon Web Services Team
P.S. Please note that the reduced bandwidth rates shown above will also take effect for Amazon EC2 and Amazon SQS. The bandwidth tier in which you will be charged each month will be calculated based on your use of each of these services separately, and could therefore vary across services.
Had first play around with Amazon EC2 today. Its great but it needs few things to really make it fly (these could be provided by Amazon or third parties).
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