Amazon Web Services lowers price of storage in its cloud

Amazon says that economies of scale are allowing it to cut some monthly charges by 12 percent

Amazon Web Services has cut the cost of storing data using its Simple Storage Service (S3) -- saving users with 50 TB stored on the service around 12 percent on their monthly bill, the company said on Monday.

S3 users are charged monthly for the amount of storage they take up in Amazon's cloud. Amazon has cut the cost of storage in its U.S. Standard region from US$0.14 per gigabyte per month to $0.125 for the first terabyte of data, and for the next 49 TB the cost is now $0.110 per gigabyte per month, instead of $0.125.

Charges for the next 450 TB and subsequent blocks of 500 TB are lower too.

Amazon continues to develop its infrastructure to drive down storage costs, which are then passed along to users, it said. The price cuts have been effective since Feb. 1.

Storage is not the only cost that enterprises using S3 face: They must also pay for requests and traffic out of Amazon's cloud.

The news of the price cut follows the release of a study by market research company Gartner suggesting that using cloud services to improve business intelligence functions can be cheaper for the first five years, but then becomes more expensive.

Amazon said its scale and focus give users an advantage over traditional IT, and another price cut is an example of that principle at work. The number of objects stored in S3 increased to 762 billion during the last three months of 2011, compared to 262 billion during the same period in 2010, according to Amazon.

Along with EC2 (Elastic Compute Cloud), S3 is the backbone of Amazon's web services offering.

At the end of last month, Amazon announced a public beta test of AWS Storage Gateway, which allows enterprises to back up application data in Amazon's cloud using a software appliance and S3.

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