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Cloud Storage Price Wars: Amazon S3 vs. Microsoft Azure

Amazon Web Services and Windows AzureOn January 23rd, Amazon announced it would be slashing Elastic Block Store prices by as much as 50%, and S3 costs by an average of 14%. Not to be outdone, Microsoft dropped the prices of Azure Block Blob Storage by up to 20% a few days later. This race to the bottom on price has been going on for years and will continue. What does this mean for customers? That bulk cloud storage is a commodity and needs to be treated as such.

The idea that organizations can cut costs by constantly changing cloud storage providers is a fantasy. Bulk cloud storage providers are the new hard drive manufacturers and eventually only a small number of companies (most likely Amazon, Microsoft and Google) will survive to deliver enormous amounts of raw storage capacity at continually falling prices. And just as organizations don’t attempt to save money by storing their data on raw commodity hard drives, nor should they do so with raw commodity cloud storage. The true value of cloud storage can only be unlocked when it is integrated into an intelligent storage system.

The State of Cloud Storage Infographic
See how top CSPs compare in the 2015 State of Cloud Storage infographic.

It is a trend has been playing out publicly for some time now, not just in the continued price wars between industry leaders, but also in the collapse of smaller, independent cloud storage providers like Nirvanix. It’s a zero-sum game – the large cloud storage providers will get larger, the small providers will be squeezed out of business and prices will keep dropping.

The enormous scale of the major competitors combined with low prices leaves only a couple of real differentiators for commoditized cloud storage – availability and performance. But even these metrics have limitations. In our annual State of Cloud Storage Report, we release the results from rigorously tests cloud storage providers. At this point, both Amazon S3 and Microsoft Azure are the only cloud storage providers that meet our standards to be used as back-end providers. This is why we control the choice of the back-end cloud that our customers will use. After all, the true value lies in the intelligence that we bring to the system, not the raw components that Amazon and Azure provide.

That said, the incredible flexibility, redundancy and scale of that these new storage components have allowed us to create functionality that’s either impossible or unfeasible with traditional storage arrays: cloud mirroring, centralized management of the entire storage infrastructure, global file synchronization, automatic data protection and disaster recovery for all locations – and more.

Bottom line – the decreasing costs of cloud storage and the increasing levels of performance creates an amazing opportunity for enterprise-class storage vendors to offer exciting new capabilities to customers.



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