Amazon will lower cloud service prices to compete with Microsoft

According to foreign media reports, according to foreign media reports, Amazon, which had downgraded the price of Internet-based cloud computing services last week, said that it will continue to cut prices when possible in order to exert pressure on rivals such as Microsoft to reduce prices for competitors.

Amazon's EC2 cloud computing service lets users run their own applications on Amazon's servers. EC2 users saw the price of this service lowered by 37% on March 5. Other Amazon cloud service prices have also been lowered. Microsoft responded to this a few days later and lowered the price of its competing Azure service.

Adam Selipsky, Amazon’s vice president of Web services, said that we expect to continue to adjust prices downwards and continue to increase capacity. Amazon has already lowered prices 19 times during the six years it has sold Web services. As more companies seek to store applications in external data centers instead of maintaining their own servers, Amazon's cloud service users are increasing.

As Amazon and Microsoft launched price competition, the continuous decline in profitability made it difficult for both companies to bear. Microsoft is facing pressure from investors. Investors worry that Microsoft is entering a market that costs more than its traditional software business. At the same time, as investment expanded into areas such as cloud services and the profitability of the Kindle Fire tablet PC in 2011 fell by half, Amazon’s stock price had fallen by approximately 25% from its record high in October last year.

According to Colin Gillis, an analyst at BGC Partners, this is another round of competitive pricing competition. This competition will not last long. Amazon has made it clear. Its interest in market share exceeds its interest in profits, at least for now.

According to market research firm IDC, the public cloud service market in 2015 will grow from $21.5 billion in 2010 to $72.9 billion. This is one of the reasons why Microsoft and Amazon have started price competition.

Analysts said that the retail industry's profits are low. Amazon, which has long operated retail business, is more adaptable than Microsoft to deal with price pressures.