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Amazon S3 Latest in Cloud Storage's Falling Fees - InternetNews.
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Amazon S3 Latest in Cloud Storage's Falling Fees

Amazon is revamping pricing on its S3 cloud storage service, moving from set monthly fees to a tiered price approach that rewards heavy data owners.

As of Nov. 1, customers now paying 15 cents per gigabyte (GB) a month for storage used will pay that only for the first 50 terabytes (TB) of data. As usage increases, the fee drops: to 14 cents per GB for the next 50 TB, and to 13 cents from 100 TB to 500 TB, after which users pay 12 cents per GB. Those costs don't include separate charges for bandwidth.

The move comes as businesses are facing a mounting wealth of data they need to store and manage. At the same time, cloud storage vendors are seeking to increase their appeal by citing cost savings as a key selling point.

Amazon (NASDAQ: AMZN) said the new pricing plan, reflects S3's growth as a service provider and its lower costs for running the service. In May, it also reduced the prices for transferring data out of the service, and likewise added additional, discounted pricing tiers for heavy users.

"We have a relentless focus on reducing our operational costs for hardware, storage, and other aspects of operating the infrastructure," Kay Kinton, an Amazon S3 spokesperson, told InternetNews.com. "As we continue to reduce these costs, we're able to pass the savings on to our customers."

"We've always said we would pass on savings to our customers when we could, and we're doing so again now," she added. "Since the service's inception, we've brought down the costs for our customers considerably, and will keep working to do so."

But Amazon's not alone in making recent price cuts. At U.S. Data Vault, an eight-year-old data protection provider, users pay $29 a month for 10 GB or 80 cents per GB if they have 5TB or more of data. Those prices reflect a nearly 50 percent drop since summer, when it had undertaken an earlier price cut.

"In just the last two years, storage equipment costs have dropped significantly, and we passed the savings to customers," Marc Shaffer, the company's CEO, told InternetNews.com.

Industry watchers agreed that decreasing storage hardware costs are prompting lower cloud storage fees across the board -- and sweetening the deal for enterprises.

"For those using [S3] purely as an archive, it's very aggressively priced," Charles King, analyst, Pund-IT, told InternetNews.com.

"In today's economy, any kind of opportunity for IT to reduce cost is welcome but you have to keep in mind storage options are typically tied to specific needs," he said.

Pitfalls in the cloud?

Of course, with services competing on price, enterprises have to ensure their data is properly safeguarded and accessible.

"It's a matter of getting what you pay for," King said, adding that higher-priced cloud options typically include additional features like data encryption and service-level agreements (SLA), promising reliability.

"Enterprises should look and see if this fits a particular need they have to archive certain data, King said. "Not all online storage is created equal."

Page 2: Amazon's SLA -- and are more cuts ahead?