Sharp price reductions in ProfitBrick’s cloud services have raised concerns from giant distributors such as Amazon. Industry analyst Michael Facemire sees the move as of high significance. He says that developers’ community is now much more inclined to ‘follow known working patterns’ rather than endorse brands.
ProfitBrick, a smaller Infrastructure-as-a-Service company, has almost cut its prices by fifty per cent in an attempt to set a strong hold in the cloud market. The company believes that the existing giants are not competing on rock-bottom prices. ProfitBricks co-founder Andreas Gauger believes that the cloud ‘price war’ rumours are exaggerated, although he thinks that there is some sort of “shadowboxing among giants.”
Gauger is skeptic of statements made by Amazon’s Vice President, Andy Jassy, who recently told that his cloud services weren’t high margin businesses. To confirm his suspicion, Gauger says that his company was making some 60 to 80 per cent in gross margins. This confirms that technology heavyweights like Amazon, Microsoft and Rackspace are either under-reporting or under-representing their profits.
Halfing the Price
In his blog, Gauger explains how it is possible for ProfitBricks to have enormous price cuts. The most obvious of the reasons is the declining trend in hardware prices although Gauger believes that prices it pays for hardware, data center Relevant Products/Services space or energy are “higher than Amazon and the other big players.”
ProfitBricks is has reduced its 1-year-old pricing by 50 per cent on its cores and RAM, both for existing and new customers. A single core, 3.75 GB of RAM and 250 GB storage on $61.65 per month will now be charged from the earlier $111.40 monthly.
Profitbricks vs Amazon Web Service – Pricing Comparsion
Can ProfitBricks Brag?
ProfitBricks makes a particular focus for leading the technology race. This is evident with its distinguished InfiniBand technology which equips ProfitBricks network with high-end interface cards. The company claims that it is the “first and so far only IaaS company using this technology.
ProfitBricks taking on Amazon, Is it easy?
Dramatic price reductions cannot guarantee that ProfitBricks will beat AWS in the near future. According to Michael Facemire, popular industry analyst, says that
“developers are not so much inclined to go with a cloud brand name like Amazon as they are to follow known working patterns.”
In Facemire’s view, Amazon and other giants are like BMW. The time-test API and uptime of these giants leave little room for a new cloud provider. Companies like a ProfitBricks attracts new comers, not the satisfied developers who give only a secondary importance to prices for services such as cloud.